Silver Market Morning

Gold Today –New York closed at $1,198.10 up $9.20 where Asia and London held it up to the Fix. The euro was 10 points weaker at $1.2286. In London gold rose strongly and the gold Fixing was set at $1,197.50 down $13.75 and in the euro, at €975.79 down €6.244 while the euro was 0.5 cents weaker at $1.2272. Ahead of New York’s opening gold was trading in London at $1,96.72 and in the euro at €975.14.

Silver Today – The silver price rose to $15.91 up 14 cents, in New York. Ahead of New York’s opening it was trading at $15.90.

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

Currency strains are not limited to the Ruble, down brutally to half the value it was earlier this year. The Ruble may fall further as Putin has told the central bank publicly that it should not use reserves to defend the Ruble exchange rate. The Fed did remove ‘considerable time’ from its statement indicating that two more meetings must be held before the raising of interest rates in the States. Immediately the dollar rose again, taking the dollar index to nearly 90. The euro slumped below $1.23, the bottom of its trading range. The Chinese Yuan, the Pound Sterling alongside other emerging economy’s currencies weakened too. [The Ruble, after central bank intervention recovered to 60 from 72 against the dollar].

We are watching to see if the Treasury steps in to halt the rise of the dollar. A strong dollar going forward is not in the interests of the U.S. We note that little was said by the Fed Chairman about the global economy influencing the U.S. economy. We also got the impression that the Fed does not think oil prices will be held down for long, calling it a ‘transitory’ situation. But the U.S. economy is gaining traction, with wages expected to start rising more vigorously in 2015 taking non-oil inflation closer to the Fed’s target.

Nevertheless, when we step back to look at the ‘big’ picture, the global monetary system is being shaken both by oil and its decline and the divergence of the U.S. economy from the rest of the world economy. This is gold positive.

While U.S. markets are trying [unsuccessfully] to push gold down, the bulk of the global gold market is preventing gold from falling, as we see today, again. If gold were going to react to the U.S. economy or interest rates, the fall in the gold price yesterday would have held and taken gold down today. Instead, gold recovered in Asia to around $1,210 again. This confirms the comments we made yesterday on Asia exerting a growing influence on the gold price and the power of traders and speculators diminishing over time. Gold can fall again, but when it does we expect to see Asian demand force it up again.

There were no changes in the holdings of the SPDR gold ETF or the Gold Trust yesterday. The holdings of the SPDR gold ETF are at 721.564 and at 161.44 tonnes in the Gold Trust. [Subscribe to www.GoldForecaster.com & www.SilverForecaster.com]

Silver– The silver price is still heavily oversold, but will follow gold in the future, we feel. www.SilverForecaster.com

Kind Regards,

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