Silver Market Morning

Gold Today –New York closed at $1,210.50 up $12.20 before Asia dropped the price to $1,206. In London’s the gold Fixing was set at $1,204.00 $0.75 and in the euro at €977.590 up €2.351 while the euro was weaker at $1.2316. There was one seller at the Fix selling 26,000 ounces and two buyers buying 20,000 ounces. Ahead of New York’s opening gold was trading in London at $1,203.10 and in the euro at €976.50.

Silver Today – The silver price closed at $16.42 down 3 cents, in New York. Ahead of New York’s opening it was trading at $16.45.

Gold _{(very short-term)} The gold price will consolidate in New York, today.

Silver _{(very short-term)} The silver price will consolidate in New York today.

Price Drivers

Yesterday was a day when the precious metal markets saw rising physical Indian demand, as we expected. Chinese demand continues robust making Asia still the tidal effect in the gold market. On the plus side, the Technical picture for precious metals has improved and will set the tone for the way forward.

The news that should be watched carefully is the euro. It fell back to its last level of support at $1.23 and will test the Fed & Treasury’s desire not to see a strong dollar. Technically the dollar can go up to 20% stronger as we have forecast previously, to $1.10 to $1.20. Precious metal investors can be encouraged by the fact that gold is moving on physical demand and is not currently reacting to the lower euro. To us this signals the diminishing influence of traders and speculators over the gold price. These have supported the gold price as they have closed short positions in the last couple of days. We expect this to continue, if the gold price holds or rises. But we believe that fundamental physical demand is the cause of this. For instance, we do not accept that the rally in oil prices caused any strength in the gold market. It is moving independently now.

Today sees the E.U. decide on Q.E. We believe this will not produce growth there, unless it is felt at consumer level. We expect a recession in the E.U. in 2015 against a rising backdrop of deflation. This will exacerbate inflation as more money in a shrinking economy accelerates inflation. This meeting may see support for the euro broken.

On the oil front Saudi Arabia has stated that it could see oil prices stabilize at $60 a barrel. We believe they have the pricing power to ensure that happens. It has to stay at that level to hurt U.S. ‘fracking’ oil producers. Let’s see?

There were no purchases or sales from or into the SPDR gold ETF but there was a purchase of 1,02 tonnes into the Gold Trust yesterday. The holdings of the SPDR gold ETF are at 720.o18 and at 162.79 tonnes in the Gold Trust now. [Subscribe to www.GoldForecaster.com & www.SilverForecaster.com]

Silver– The silver price is waiting for gold to lead the way. www.SilverForecaster.com

Kind Regards,

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