Silver Market Morning

Gold Today – The gold price closed at $1,292.40 down $12.50 on Thursday in New York. In Asia and early London, prices held that level. The gold price was Fixed at $1,292.75 down $7.25 and in the euro at €959.725 down €4.953, while the euro was slightly weaker at $1.3470. The Fixing was very quick indicating lower volumes. Ahead of New York’s opening, gold was trading at $1,294.20 and in the euro at €962.02.

Silver Today – The silver price closed in New York at $20.37 down 55 cents. Ahead of New York’s opening it was trading at $20.47.

Gold _{(very short-term)} We expect gold to consolidate, again, in New York today.

Silver _{(very short-term)} We expect silver to consolidate, again, in New York today.

Price Drivers

There were sales of 3.591 tonnes of gold from the SPDR gold ETF, which explains the drop in the gold price in the last day. This has brought the gold price nearly to support in the Technical picture. The holdings of the gold ETFs stand at 801.844 tonnes in the SPDR gold ETF and at 165.06 tonnes in the Gold Trust. [Subscribe www.GoldForecaster.com – ensure your gold will not be confiscated and you not penalized -see www.Stockbridgemgmt.com ].

As we said yesterday, demand from Asia comes in below $1,300 and in line with this the premium on the gold price over London has climbed to $1 showing physical demand is coming in from there. We expect Asian demand to come in as prices remain below $1,300. However, trading in the developed world’s markets, remains relatively thin. We watch to see if this will follow through to take the vulnerability of the gold price to further falls away.

The euro has resumed its fall against the U.S. dollar once again falling from $1.3473 to $1.3448 continuing the trend we highlighted earlier this week.

While we are usually skeptical of the influence of most political events’ effect on the gold price, including the Ukraine, we do note that they can have a direct effect at certain times. In the Ukraine, one influence on the gold price that can eventually impact the gold price is the collapse of government. With the Western half of the country pro Europe and the East mainly pro-Russian, the potential for the country to move to civil war has now jumped up a notch. As we have seen from the threats of sanctions and Europe’s refusal to follow the U.S. on this the interests of Europe, particularly Germany and France are bound up in the Ukraine/Russia. Hence such a conflict will hurt the whole of Europe badly. This will turn investors to gold before then.

Silver– The silver price fell much more than gold yesterday, showing a greater sensitivity to the downside than gold. But this will always be the case as the market in silver is smaller and more influenced by professional investors in the developed world. [www.SilverForecaster.com]

Regards,

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