Silver Market Morning

Gold Today –New York closed at $1,229.60 up $24.60 before Asia took it up to $1,236 then down to $1,231. The euro recovered half a cent at $1.2388. In London’s the gold Fixing was set at $1,228.25 up $21.75 and in the euro, at €991.884 up €16.134 while the euro was slightly stronger at $1.2383. Ahead of New York’s opening gold was trading in London at $1,228.00 and in the euro at €992.16.

Silver Today – The silver price closed at $17.04 down 11 cents, in New York. Ahead of New York’s opening it was trading at $17.03.

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

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

Price Drivers

There were purchases of 2.69 tonnes of gold into the SPDR gold ETF but no sales or purchases into or from the Gold Trust on Tuesday. The holdings of the SPDR gold ETF are at 721.811 and at 162.37 tonnes in the Gold Trust. [Subscribe to www.GoldForecaster.com & www.SilverForecaster.com]

The last two days have seen a jump in the gold price from the base it had built around $1,200 to the current $1,230. The market’s action was not driven by Indian and Asian demand, [which remains robust at these levels], but by short covering in the U.S. We have watched a long campaign, that started at the beginning of 2013 to break the gold price down from $1,650 reaching a low in April 2013, when a massive bear raid [including physical sales] totaling, from gold ETFs and banks, around 1,300 tonnes. This dropped to a trickle in 2014 as gold prices dropped, with occasional waves [such as last month] coming though, but now such sales are, again, at a trickle. In the last month traders and speculators tried to make these raids drop the gold price again but without the backing of sufficient physical gold sales. The final plummeting of gold and silver prices then occurred, a couple of weeks ago, when the gold price dropped quickly to $1,137. At this point traders and speculators saw they had no support for the fall and reversed their positions, taking gold back through resistance to $1,200. The Technical picture suddenly improved leading to short positions being closed and long positions being established. We expect short covering to continue. It’s a foolish trader or speculator that goes short now as the gold market, long supported by Asian demand, now sees gold import restrictions lifted in India and Chinese demand continue to grow, alongside a change in traders and speculators attitudes in the U.S. It is clear, in the light of the last month that the ability of U.S. markets to dominate the gold price and by extension the silver price, longer term, is seeping away.

Silver– The silver price is likely to run much further and faster than gold in the short term. The short positions in that market are still extraordinarily large! As we said yesterday, the silver price will not be affected by its fundamentals. It is tied to the gold price by an elastic rope that sends it higher on the upside and lower on the downside The rise in the silver price in the last month has been very strong [almost $3] but it still has a long way to go before it is back to where it was when gold was in the middle area of $1,200. www.SilverForecaster.com

Kind Regards,

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