Silver Market Morning

Gold Today – The New York gold price closed at $1,280.50 down $2.80 on Tuesday, in New York. Asia lifted the price $4 on Wednesday morning. London held it there at the opening. The gold price was Fixed in London at $1,284.00 down $2.50. In the euro, it Fixed at €93o.907 down €1.542 as the dollar stood at $1.3793 up from $1.3797: €1. Ahead of the opening in New York gold stood at $1,283.70 and in the euro at €930.86.

Silver Today – The silver price closed at $19.81 up 5 cents on Tuesday’s close, in New York. Ahead of New York’s opening, it was trading at $19.86.

Gold _{(very short-term)}

We expect the gold price to consolidate with a stronger bias, in New York.

Silver _{(very short-term)}

We expect the silver price to consolidate with a stronger bias, in New York.

Price Drivers

The pattern of New York, trying to push the price down while Asia lets it recover somewhat, was repeated yesterday and this morning. Silver investors have factored this in as again, they lifted the silver price slightly, while the gold price drifted slightly lower, yesterday. This is a new feature for silver and one we will watch with interest in the days to come.

The markets have not yet fully digested Janet Yellen’s comments that the Fed will continue to stimulate until the unemployment levels have dropped strongly until more workers are permanently employed, not just in part time jobs. With the U.S. economy 70% driven by consumer spending, this is a key criteria by which to measure a real recovery. Bear in mind that many job losses over the last two decades have been due to the structural employment losses brought about by computerization. This is set to continue and worsen as artificial intelligence wipes out more jobs permanently. So when we get indications that interest rates will stay low for a long time we need to add another ‘long’ to the sentence. This makes the U.S. monetary scene and the dollar vulnerable.

This is likely to be countered by the E.C.B. trying to stave off deflation, so we wait to see if they are going to drop interest rates and or introduce vigorous asset purchases tomorrow? Add the two sides together and the exchange rate between the dollar and the euro seems set to show no real change while they both weaken together.

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On Monday we saw a sale of 2.098 tonnes from the holdings of the SPDR gold ETF but none from the Gold Trust. Their respective holdings stand at 810.978 tonnes and 165.20 tonnes. This makes nearly six tonnes sold from the SPDR gold ETF this week. Sales from the fund have not yet reached the amount bought into the fund in the last month. It seems that the new investors are simply speculators taking a short-term position. The gold price must show a clear direction before they increase the term of their positions.

Silver – Silver is showing a resilient tenacity that gold is not yet showing. Bearing in mind that silver is usually the passenger on the gold train, we are waiting to see if it is becoming a train on the back end of gold?

Regards,

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