Silver Market Morning

Gold Today – The New York gold price closed at $1,324.60 down nearly $6 on Friday in New York. Then, the Ukraine story turned global and gold jumped to $1.347.20 in Asia. London held it there ahead of the Fix. The gold price was Fixed in London at $1,344.25, up $16.50. In the euro, it Fixed higher at €975.579 up €13.929, while the dollar stood at $1.3779. Ahead of the opening in New York gold stood at $1,344.35 and in the euro at €975.90. Please note it has not moved in the euro since Thursday last!

Silver Today –The silver price closed at $21.17 down 11 cents in New York. Ahead of New York’s opening, it was trading higher at $21.48.

Gold _{(very short-term)}

Gold will consolidate with a positive bias, today in New York.

Silver _{(very short-term)}

Silver will consolidate with a positive bias, today in New York.

Price Drivers

There were no purchases of gold into the SPDR gold ETF [GLD] on Friday or into the Gold Trust, which left their respective holdings at 803.704 tonnes and 164.24 tonnes. It seems that there could be ‘stale bulls’ selling as gold rises, but as we have seen in the last month, these are not able to exert a downward influence on the gold and silver prices. Has the selling stopped?

The situation in Ukraine is now not an internal matter, but a ‘pushing’ between the West and Russia reminiscent of the ‘cold war’. Russia will not permit a loss of power over, what it believes is, its ‘vital’ interest and the West will try to capitalize on the opportunity of having an influence over a ‘Russian satellite’ country. This takes it from the localized ‘revolution’ to a global, longer-term situation. The increase in global tensions as a result, increases monetary instability and uncertainty. However, we feel that apart from a short-term influence on gold it will not become nearly as great a factor as Asian demand for gold, in 2014. We mustn’t overestimate the influence of the Ukrainian on gold!

The Chinese Yuan has fallen further over the weekend. It was at its strongest close to Yuan 6: $1 [6.04 last week]. It is now at Y6.145: $1. We do not believe this has anything to do with the Ukraine, but all to do with the long-term objectives of the Chinese Government as it internationalizes the currency. The volume of global trade done in Yuan doubled in 2013 and will keep on rising fast in 2014. It is only a matter of time before even U.S. buyers will be asked to pay for Chinese imports in Yuan. That will be a major trigger to increasing the presence of the Yuan as a global reserve currency as well as the ‘tolling of the bell’ for dollar hegemony. [Get the fuller, big picture from www.GoldForecaster.com and www.SilverForecaster.com to subscribe and visit www.StockbridgeMgMt.com to hold gold so it can’t be confiscated]

Silver – The silver price will continue to be dominated by and move with, the gold price! Why do we mention silver above, when speaking of gold prices? It is clear to silver price observers that silver price movements are dependent on gold price movements, no matter what the demand / supply of silver is. This has been the case for years now. Silver moves in a more volatile fashion to gold but always goes the same direction, following gold.

Regards,

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