Silver Market Morning

Gold Today –New York closed at $1,293.50 up $0.80 as the euro started to weaken again. In Asia and early London the gold price slipped slightly to $1,287.1 with the euro a tad stronger at $1.1581. The Fix saw the gold price set at $1,287 down $11.00 and in the euro, at €1,107.955 down €13.718, while the euro was stronger at $1.1616. Ahead of New York’s opening gold was trading in London at $1,286.60 and in the euro at €1,106.94.

Silver Today – The silver price closed at $18.15 up 22 cents. Ahead of New York’s opening it was trading at $18.07.

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

There were sales of 1.792 tonnes of gold from the SPDR gold ETF and a purchase of 2.2 tonnes into the Gold Trust on Wednesday. The holdings of the SPDR gold ETF are at 740.451 and at 167.62 tonnes in the Gold Trust. On balance the U.S. continues to buy. [Subscribe to www.GoldForecaster.com & www.SilverForecaster.com].

Today, the long awaited announcement of Q.E. is going to be made. Talk is of a program to buy €50 billion worth of bonds a month until over €1 trillion has been bought in several years time. The hype is that this will lead to economic growth. Perhaps a more realistic appraisal is that it will deflect any banking or sovereign debt crisis by keeping the banking and national debt systems relatively ‘healthy’ while consumers struggle to instigate growth over time. In such an environment Draghi hopes that deflation will not cause the feared wounds it usually causes. If a ‘Greece exit’ takes place, then the seismic shocks will have a buffer now. With the clear disunity amongst the economically ‘strong’ member states and the weak, the E.U. continues to look vulnerable and the euro falling. Draghi is doing a very good job, seemingly without the help of the governments he serves.

Whatever economic growth comes over time is more likely to be assisted by lower oil prices. Add the fall in the oil price to the fall in the euro and we see that oil prices are down in the E.U. by around 60% on last year, against 50% in the U.S. with more to come, we feel.

In this global environment gold will continue to be attractive as fears for the future remain in position and confidence in the E.U. economy at a low level.

In China we are moving fast to the Chinese New Year on the 17^th February and remain in the ‘marriage season’ in India at an ‘auspicious’ time of the year for buying gold. In the first week of the year demand was 15% higher than in the week ending 2014 in China. We see this demand rising in the next few weeks.

Silver– The silver price is keen to hold its gains waiting for gold to hold above $1,300. www.SilverForecaster.com

Regards,

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