Silver Market Morning

Gold Today – The gold price closed at $1,211.20 down $17.80 on Wednesday. Asia and London took down to $1,204.80. The euro is weaker this morning at $1.2587 down 1.48 cents on the day. The Fix was set $1,205.75 down $23.50 and in the euro at €958.085 down €6.487, while the euro stood weaker at $1.2585. The volumes of gold traded were two sellers selling 40,000 ounces and two buyers buying 24,000 ounces before the pro-rata process kicked in. Ahead of New York’s opening, gold was trading at $1,206.20 and in the euro at €957.91.

Silver Today – The silver price closed in New York at $17.07 down 18 cents. Ahead of New York’s opening it was trading at $16.87.

Gold _{(very short-term)} Gold is likely to consolidate, in New York, today.

Silver _{(very short-term)} Silver is likely to consolidate, in New York, today.

Price Drivers

In New York there were sellers of 1.196 tonnes of gold from the SPDR gold ETF and a sale of o.36 from the Gold Trust on Wednesday. The gold price will be driven lower by a strong dollar, but once again we expect Asian demand to come in and snap up gold once they believe the price is a bargain. But New York and London continue to trade gold alongside the euro which fell 1.55 cents overnight up until now with the dollar index over 86. The Yen is moving close to 110 to the dollar and it wants more weakness still. The dollar has risen in all currencies and will do so because other currencies want just that. But the U.S. has made it clear that it does not want to see a strong dollar. Market realities put an acceptable level for the dollar against the euro at $1.26 to $1.29, so the present $1.2580 represents a far stronger dollar, implying that we could be seeing a peak in the dollar as the market euphoria overrides good investor sense. If so, gold will have an added upward impetus, apart from Asian demand. But it would not be wise to fixated on price levels at a time of structural changes in the market. More to the point, what is the way forward from here?

The Fed’s announcement said, basically, that if the economy continues to grow then interest rates will rise earlier than expected [1^st quarter of 2015?] and if not then rates will rise later than expected [2^nd half of 2015?]. But what is sure is that the Fed saw greater strength in the U.S. than before. Markets assumed that this will benefit equities. But once again stark realities dictate that future growth has already been discounted in equity markets and fixed interest rate markets [Treasuries] must also be close to a peak. If this is the case, then we can expect the sort of volatility that comes with peaking markets ahead of direction changes.

U.S. investor selling of gold from the SPDR gold ETF in the last two weeks appears to have discounted yesterday’s news from the Fed, because there were only small sales of 1.196 tonnes of gold, yesterday The holdings of the gold ETFs stand at 742.397 tonnes in the SPDR gold ETF and at 161.69 tonnes in the Gold Trust. [Get the bigger picture - Subscribe to www.GoldForecaster.com & www.SilverForecaster.com – to protect against confiscation and penalties -see www.Stockbridgemgmt.com ]

Silver– Silver prices dropped heavily alongside gold and will still follow gold, wherever it goes. www.SilverForecaster.com

Kind Regards,

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