Silver Market Morning

Gold Today – The gold price closed at $1,296.60 up $3.70 on yesterday, in New York. It was not showing any independent moves, simply moving with the dollar. In Asia it was being pulled back to $1,293 just ahead of London’s opening. In London it was Fixed this morning at $1,289.75 down $12.25 and in the euro at €930.019 down €6.805. The euro itself stood at $1.3868 barely changed. Ahead of the opening in New York gold stood at $1,290.40 and in the euro at €930.20.

Silver Today – The silver price closed at $19.59 down 8 cents on yesterday, in New York. Ahead of New York’s opening, it was trading higher at $19.40.

Gold _{(very short-term)}

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

Silver _{(very short-term)}

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

Price Drivers

Yesterday we said that, “We believe that China, either knowingly or unknowingly, is controlling the gold price, not New York!” This may have confused readers because normally one controls a price by leading it higher. This would be reasonable, normally. But when one wants volume and not higher prices, other methods can be used, very effectively.

There is a large debate around the amount of gold imported into China. We are given precise amounts that enter China via Hong Kong, but these differ considerably from the amount of gold delivered to gold owners from the Shanghai Gold Exchange. If this is a net figure these numbers are valid, as there sellers as well, despite the vast majority being holders for the long term. We now hear that Beijing is opening up for gold imports too and are sure these numbers are not going to be released to the public. This highlights another point about Chinese gold policy. It is not in their interests to broadcast just how much gold they are importing, just as it is not in their interests to broadcast any increase in the gold reserves held on behalf of the People’s Bank of China, as yet. So don’t expect to see definitively accurate gold import figures, unless the Chinese government deems it is in their interests to do so!

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There was no change to the holdings of the SPDR gold ETF or the Gold Trust. Their respective holdings still stand at 792.139 tonnes and 164.41 tonnes. The efforts of a group of speculators to suppress the gold price by exerting downward pressure on precious metal prices at the point in the 24-hour market when they are at their quietest [as they are closing or just opening] continue unabated. But to be successful they do need physical sales to keep those prices down. We watch to see if these are being triggered.

Silver – The silver price is again following the gold price in tandem and unlikely to move differently soon

Regards,

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