Silver Market Morning

Gold Today – The gold price closed at $1,289.30 up $7.30 on Thursday’s level in New York. In Asia and London, gold prices were slightly higher in both the dollar and the euro. The gold price was Fixed at $1,292.00 up $4.00 and in the euro at €980.943 up €5.407, while the euro was weaker at $1.3171. Ahead of New York’s opening, gold was trading at $1,285.60 and in the euro at €974.79.

Silver Today – The silver price closed in New York at $19.53 up 9 cents. Ahead of New York’s opening it was trading at $19.50.

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

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

Price Drivers

There were no sales or purchases from or to the SPDR gold ETF and but there were sales of 0.51 from the Gold Trust on Thursday. The holdings of the gold ETFs stand at 795.597 tonnes in the SPDR gold ETF and at 165.45 tonnes, in the Gold Trust.

Germany is slowing and taking the Eurozone into deflation. While Draghi continues to wait for more data the current data tells us that deflation is on the way. He has almost reached the end of his stimulus options as a central bank, without government support. He is now calling for the governments to act and they are not doing so. There is a point where monetary stimulus does not produce growth, simply stokes inflation without growth. The E.U. is almost there. After all, combine monetary stimuli with deflation and you get accelerated inflation. It may well be that the E.U. and its members have asked too much of the E.C.B.

Japan is facing a similar situation, where household spending dropped 5.9% in July. This is attributed to the sales tax, but we see it being simply thrift and an unwillingness to move away from wisdom.

Without innovation and on the ground confidence in growth, can government really provide growth? It seems that in the light of the last seven years, they can’t.

So investors should ask, what happens to the gold price in deflation as well as in inflation?

These are problems that must be linked to confidence in the monetary system not just to these problems, in isolation. Expect Draghi to act in the next fortnight!

Meanwhile gold is stronger overnight rising through the 200-day average and tackling the 100-day average once more. Next week see the start of September when the ‘season’ starts.

The significance of the invasion of the Ukraine lies in the negative economic impact for Russia and the Eurozone. The future has darkened considerably for the E.U. overnight.

What is going to be an eye opener for the monetary world is the coming referendum on gold in Switzerland. This is an instance where the voters actually can dominate government and the banking system. [Subscribe www.GoldForecaster.com – ensure your gold will not be confiscated and you not penalized -see www.Stockbridgemgmt.com ].

Silver– The silver price is quietly firm, again. www.SilverForecaster.com]

Regards,

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