Silver Market Morning

Gold Today –The New York gold price fell back to $1,243.00 from $1,269.80 at the close on Thursday. Asia held it around there before London fixed it at took it down to $1,258.20 ahead of the Fix. It Fixed at $1,246.50 down $7.50 on Thursday. In the euro, it Fixed at €920.538 down €1.656 reflecting a stronger dollar which stood at $1.3533 up 0.65 cents. Ahead of the opening in New York gold stood at $1,245.65 and in the euro at €920.73.

Silver Today –The silver price fell to $19.20 down 58 cents in New York. Asia and London took it back up to $19.24. Ahead of New York’s opening, it was trading at $19.24.

Gold _{(very short-term)}

We expect gold to consolidate with a positive bias today, in New York.

Silver _{(very short-term)}

We expect silver to consolidate with a positive bias today, in New York.

Price Drivers

Thursday saw, for the third time in the last fortnight, purchases of gold into the SPDR gold ETF [GLD] of 1.00 tonne with none sold from the Gold Trust gold ETF, leaving their respective holdings at 793.555 tonnes and 161.37 tonnes. The remarkable feature of New York yesterday was the rapid fall at the opening in New York down to nearly $1,240 before trying to rise again. It was as though whoever sold the gold price down [or drove it down] held it down until the close at $1,243. At first we thought it was a heavy sale from the SPDR gold ETF [GLD] but as you can see there were purchases, not sales, from there. This is two days where the gold price was expected to rise but fell. History has taught us unless such falls are accompanied by physical sales the price is likely to recover quickly. With today being the most dramatic of the week and February next week we favor the upside in the gold price today.

The Chinese Lunar New Year is today so we again expect a fall in demand from there for at least the few days. Perhaps this gave large short sellers the opportunity to drive prices lower, back to support yesterday. With Chinese demand returning after their holiday speculators are taking high risks in going short for longer than the holiday, there.

The South Africa Rand is on the back foot again and slipping lower against the dollar, but today it is dollar strength, not so much Rand weakness that is lowering that exchange rate. This drops lifts the price gold miners receive.

The dollar is trying to recover against the euro. Our opinion is that the lowering of QE while the Fed promises to hold interest rates at the lows is no cause for dollar strength.

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Silver – The silver price remains on the back foot too, looking for gold to turn around before it does.

Regards,

Julian D.W. Phillips for the Gold & Silver Forecasters