Silver Market Morning

Gold Today –New York closed at $1,172.80 down $22.20 before Asia took it higher to $1,182 ahead of the Fix. The euro was 18 points weaker at $1.2238. In London gold remained steady and the gold Fixing was set at $1,179.50 down $15.75 and in the euro, at €964.11 down €10.968 while the euro was 0.024 of a cent weaker at $1.2234. Ahead of New York’s opening gold was trading in London at $1,179.60 and in the euro at €964.51.

Silver Today – The silver price rose to $15.75 down 29 cents, in New York. Ahead of New York’s opening it was trading at $15.73.

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

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

Price Drivers

In very thin trade, as we mentioned yesterday, traders and speculators saw opportunities to push gold and silver prices lower. We expect to see Asian demand to come in to pick up physical gold at these prices. We do expect to see opportunism like this in the holiday period, challenging markets. The skill needed to do this is to try to incite physical selling so that short positions can be closed without driving prices up. There were no changes in the holdings of the SPDR gold ETF but a purchase of 0.31 tonnes into the Gold Trust yesterday. The holdings of the SPDR gold ETF are at 724.552 and at 161.35 tonnes in the Gold Trust. As you can see, once again, the price has been moved on almost no physical sales of gold. This tells us that any demand from Asia in reaction to the price falls will lift prices back to the $1,200 levels in quick time. If the gold and silver prices are made to fall further on these festive days, the bounce will be even stronger.

2015 is likely to be a year of deflation, re-titled, disinflation, so as to avoid the connotations that bring that fear that is aligned to the word deflation. Many say that if gold rises in inflation, it must fall in deflation. History shows that this is not the case at all.

Deflation brings falling prices and adds value to cash. Some then consider gold as an asset and not cash. In normal times, when there are no strains on the monetary system currencies act exclusively as money and are made to inflate. Investors then lift gold prices to reflect the ‘cheapening’ of money.

But at all times, internationally, gold is considered money or ‘cash’, as well as an asset, which is why central banks hold so much of it. But when strains are placed on economies and instability and uncertainty invades the global monetary system, gold as both cash and an asset, becomes the last resort money, when confidence in currencies evaporates. 2015 will see this happen. [Subscribe to www.GoldForecaster.com & www.SilverForecaster.com]

Silver– The silver price will still move with gold but has become considerably more volatile than gold. As a mainly Americas traded metal we expect this volatility to continue in the days to come. www.SilverForecaster.com

Kind Regards,

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