Silver Market Morning

Gold Today –New York closed at $1,195.00 down $3.10 before Asia took it higher to $1,200 again ahead of the Fix. The euro was 30 points weaker at $1.2256. In London gold remained steady and the gold Fixing was set at $1,195.25 down $2.50 and in the euro, at €975.078 down €0.712 while the euro was 0.014 cents weaker at $1.2258. Ahead of New York’s opening gold was trading in London at $1,196.55 and in the euro at €975.98.

Silver Today – The silver price rose to $16.04 up 13 cents, in New York. Ahead of New York’s opening it was trading at $16.10.

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

In a festive week in the developed world, turnovers in London and New York will be thin, leaving the market in Asian hands. As we have said many times before, Asia won’t chase prices and will probably hold the gold price around $1,200, where we believe it will hold even when the developed world returns to the market. What will move the gold price are ‘events’ that cause developed world investors to turn to gold. We believe there could be many of these in 2015/2016, ranging from reactions to even the slightest of rises in U.S. interest rates, to a strong dollar, to consequences of deflation in Europe and the lower oil price impact in currency markets. There are several more that could precipitate a rise in the gold price.

What is clear is that the 2-year long battle to drive the gold price lower in 2014 appears to have been halted and gold has formed a solid base entering into 2015. Certainly the risk-reward ratio in now in gold and silver’s favor. We are seeing evidence of this in the falling euro not pulling down gold prices.

The euro has sunk to a new recent low in the mid-$1.22 level down from the $1.23-$1.25 level that has held for most of the second half of 2014. This means the gold price continues to rise in the euro and most other currencies other than the dollar, where it has stabilized.

Over the weekend, Saudi Arabia has made it clear it will not reduce production no matter what. We do expect to see lower oil prices below $60 and see the current consolidation of the oil price as only temporary. We do see U.S. oil production being hurt most of all by these prices. While holiday times are usually quiet times in markets, they are also opportunities for traders to have a disproportionate impact on a market. We would not be surprised to see some drama while others are on holiday in several markets.

In a gesture of support for Russia, Chinese Commerce Minister Gao Hucheng said expanding a currency swap between the two nations and making increased use of Yuan for bilateral trade would have the greatest impact in aiding Russia. So the global divisions widen and Asia consolidates economic cooperation separately from the developed world. This remains gold positive. [Subscribe to www.GoldForecaster.com & www.SilverForecaster.com]

Silver– The silver price is being controlled by U.S. Investors, but will follow gold in the future, we feel. www.SilverForecaster.com

Kind Regards,

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