Silver Market Morning

Gold Today –New York closed at $1,261.20 down $13.40. In Asia lifted gold slightly to $1,264 but ahead of London’s opening recovered to $1,284.70. At the Fix gold was set at $1,281.00 down $11.75 and in the euro, at €1,108.80 down €20.133, while the euro was barely changed at $1.1553. Ahead of New York’s opening gold was trading in London better, at $1,267.60 and in the euro at €1,107.85.

Silver Today – The silver price closed at $17.28 up 8 cents. Ahead of New York’s opening it was trading at $17.45.

Gold _{(very short-term)} The gold price will consolidate with a positive bias, today in New York.

Silver _{(very short-term)} The silver price will consolidate with a positive bias, in New York today.

Price Drivers

There were sales of 1.792 tonnes of gold from the SPDR gold ETF and a sale of 0.03 of a tonne from the Gold Trust on Tuesday. The holdings of the SPDR gold ETF remain at 764.943 and at 167.51 tonnes in the Gold Trust.

The gold price has pulled back to above support once again as gold continues to consolidate but on low U.S. turnover. With China taking more that is being supplied to the market from newly mined gold and scrap, a question has arisen as to how the price can fall in such an environment. It can happen when there is sufficient liquidity in the London market which continues to be the main hub for gold pricing. Over time as this liquidity is drained the upside pressure would be built to the point where such speculators and traders do not have the power to push prices down in such a market. The difference between short-term market moves and long-term moves is then described by such action. We saw the same in 2005 when after two decades of falling and low prices the gold price brushed aside such downward pressures and surged to more than double the previous peak. Can such pressures exert themselves again? We believe they can as supply has now peaked from newly mined gold and scrap [until much higher prices are seen] and yet Asian demand is continuing to grow. Bearing in mind that Asian demand is to find financial security by new buyers who are middle classes getting richer or from new entrants into the middle classes. Such demand is unlikely to fade or lessen for the foreseeable future. What we don’t know is when the upward pressure on the gold price will overwhelm speculative liquidity, but we know it is close.

The euro is recovering strongly at the moment while gold is slipping against the dollar. The move of the dollar and the gold price together is still happening. With the euro rising to $1.1482 before London opened the 1% rise equates to a 1% fall in gold.

In his meeting with Germany’s Finance Minister, the Greek finance minister Yanis Varoufakis’ will propose the exchange of outstanding debt for new growth-linked bonds, running a permanent budget surplus and targeting tax dodgers. Furthermore, Mr. Varoufakis said Syriza would not seek a write-off of Greece’s €315 billion sovereign debt. [Subscribe to www.GoldForecaster.com & www.SilverForecaster.com].

Silver– The silver price has a more stable, positive tone to it now, while gold falls. www.SilverForecaster.com

Regards,

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