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Silver Market Morning

Gold Today –New York closed at $1,257.60 down $27.30. In Asia gold rose to $1,262.40. London lifted it slightly higher before the Fix set at $1,263.50 down $12.00 and in the euro, at €1,114.984 down €14.377, while the euro was stronger at $1.1332. Ahead of New York’s opening gold was trading in London better, at $1,263.70 and in the euro at €1,113.24.


Silver Today – The silver price closed at $16.95 down $1.04. Ahead of New York’s opening it was trading uncertainly at $16.97.


Gold (very short-term) The gold price will look for a quick bottom, in New York, today.


Silver (very short-term) The silver price will look for a quick bottom, in New York today.


Price Drivers

There were purchases of 5.675 tonnes of gold into the SPDR gold ETF but no action in the Gold Trust on Thursday. The holdings of the SPDR gold ETF are at 758.372 and at 167.54 tonnes in the Gold Trust. While this was a substantial purchase, New York drove the price down. Once again it is unlikely that traders and speculators have the power to overwhelm the gold price without physical sales of gold. The change of trend has not broken down yet. As it nears support the gold and silver price may react strongly soon. We expect the gold and silver price to be volatile going forward, in the short-term.


The euro recovered again against the dollar whose index is 94.62. We do not see this as a ‘strong’ dollar but as other currencies weakening. As global funds seize on the interest rate arbitrage opportunities of borrowing in Europe and even lending into the U.S. not only will U.S. yields fall more but the dollar will continue to rise and other currencies fall. If the euro, for instance falls to 1: 1 then its fall will have been nearly 40%. We will be surprised if the U.S. finds that palatable? It would be symptomatic of currency breakdowns.


It is well to note that gold production worldwide has peaked and globally the break-even point remains around $1,300. With hoarded gold in very firm hands, we see gold investment rising in 2015 and we do not see a surplus in gold to the market.


With debt issues becoming the focus of financial market’s attention worldwide it is only the present reality of record low interest rates preventing many financial storms from breaking out. The question on all investor’s minds is, “when will interest rates rise?” How long will we sit in ‘the quiet before the storm’? If the, now global, low rate environment does not spur real, ground level, sustainable growth then financial market turmoil will come. That’s why the Fed is in waiting mode. Like all of us, the Fed is watching wage growth and labor numbers, as it is the U.S. consumer who will bring real growth, not financial markets. The lesson here is that the Fed and the banking system has not led growth but is following it. [Subscribe to &].


Silver– The silver price should remain volatile, for the time being, relative to gold.




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


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