Silver Market Morning

Gold Today – The gold price closed at $1,296.10 down $0.50 on yesterday, in New York. In Asia it was being pulled back to $1,293 just ahead of London’s opening, once again. In London it was Fixed this morning at $1,292.00 up $2.25 and in the euro at €934.674 up €4.655 as the dollar strengthened to $1.3823 before slipping slightly to $1.3834 ahead of the opening of New York, when gold stood at $1,292.30 and in the euro at €934.15.

Silver Today – The silver price closed at $19.49 down 10 cents on yesterday, in New York. Ahead of New York’s opening, it was trading higher at $19.35.

Gold _{(very short-term)}

We expect the gold price to consolidate, today in New York.

Silver _{(very short-term)}

We expect the silver price to consolidate, today in New York.

Price Drivers

There was no change to the holdings of the SPDR gold ETF or the Gold Trust, once again. Their respective holdings still stand at 792.139 tonnes and 164.41 tonnes. It appears to be more and more difficult for high frequency traders to shake the gold price down to lower levels. This is important for the gold price as it confirms the robust nature of support. The gold price’s trading range is narrowing to a point where a strong move is becoming likely in the short term. We have no doubt that speculators will try to this a fall in the gold price, which could produce short-term volatility. [For more on this, subscribe to www.GoldForecaster.com and www.SilverForecaster.com and visit www.StockbridgeMgMt.com to hold gold out of reach of potential confiscation]

The Chairwoman of the Fed, Janet Yellen is expected to announce today, no change in the future date when U.S. interest rates are due to rise and to confirm that the Fed is waiting for the data to give direction. This would be gold neutral.

Inflation in the E.U. only rose 0.7% leading the market to expect the Eurozone to embark ion quantitative easing in around 2 months. This is gold positive and euro negative. So overall the picture on the way the gold price will move short-term is inconclusive.

Likewise in India, where elections drag on, the prospect of easing the 80% of gold imported can stay there provided that 20% is re-exported, is still under discussion, with the prospect of this easing becoming graduated over time. As we move to the quiet period in Indian gold imports, it is unlikely that this will affect global gold prices, because Indian demand has been at 50% of past demand [closer to 75% if smuggling is added] a level we would expect in the quiet time anyway. Any easing of restrictions could see demand jump over this quiet period in preparation for the start of the Indian ‘gold season’ in September.

Silver – The silver price moved slightly overnight ahead of a strong move in line with the one we expect for the gold price.

Regards,

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