Silver Market Morning

Gold Today – The gold price closed at $1,280.4 up $3.30 on Friday’s level in New York. In Asia and London, gold prices slipped to $1276 as the dollar strengthened to $1.2305. The gold price was Fixed at $1,277.25 down $3.75 and in the euro at €964.181 down €0.936, while the euro was weaker at $1.3247. Ahead of New York’s opening, gold was trading at $1,278.30 and in the euro at €968.48.

Silver Today – The silver price closed in New York at $19.48 up 1 cent. Ahead of New York’s opening it was trading at $19.41.

Gold _{(very short-term)} We expect gold to move with the euro, in New York today.

Silver _{(very short-term)} We expect silver to move with gold and the euro, in New York today.

Price Drivers

There were no purchases or sales into or from the SPDR gold ETF or the Gold Trust on Friday. The holdings of the gold ETFs stand at 800.085 tonnes in the SPDR gold ETF and at 166.41 tonnes, in the Gold Trust. The gold market remains thin and moved by arbitrageurs moving gold with the euro. The dollar continues strong against all currencies including the euro and the Yen. [Y104: $1] We expect them to continue to move gold in this way until physical demand picks up. The Technical picture has broken down so until the gold season is with us, prices have a downward bias. The question before investor’s is, “Are the prices we are seeing now at bargain basement levels?”

The message from Janet Yellen contradicted market expectations that interest rate rises were coming earlier than previously thought. She made it clear that the ‘slack’ in the employment picture still remains and so interest rate rises will not come until this picture is stronger. U.S. markets are ‘chomping at the bit’ to discount potential interest rate rises, but the impression being taken from the Fed is that interest rate rises will not come before mid-2015. We feel that such speculation could lead to missteps by investors. The picture that came from Jackson Hole was that the U.S. recovery is solid but far from satisfactory. The global economy is not in the same health. The Eurozone continues to disappoint and while the E.C.B. continues to wait for statistics to prompt further action, we feel that the wait may add to the problems of the Eurozone and that he should have acted more by now. The message that came from Jackson Hole was that governments should be doing more than they are. It is puzzling that the media has not highlighted government’s failure to take effective action over so long a period on both sides of the Atlantic. This inaction is due to systemic problems that are not likely to be addressed.

The outcome for gold continues to be positive as we move through a poor global economic outlook to a fragmentation of the monetary system in the relatively near future. Short-term further falls in the gold price appear to be limited according to the Technical picture, but are likely. [Subscribe www.GoldForecaster.com – ensure your gold will not be confiscated and you not penalized -see www.Stockbridgemgmt.com ].

Silver– The silver price is holding its ground. www.SilverForecaster.com]

Regards,

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