Silver Market Morning

Gold Today –New York closed at $1,211.20 up $2.70. In Asia the gold price was lifted to $1,215.60. London Fixed the gold price at $1,217.75 up $11.25 and in the euro, at €1,068.295 up €8.939, while the euro was almost unchanged at $1.1399. Ahead of New York’s opening gold was trading in London at $1,217.4 and in the euro at €1,068.18.

Silver Today – The silver price closed at $16.45 down 6 cents. Ahead of New York’s opening it was trading at $16.65.

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 0.299 tonnes of gold from the SPDR gold ETF but none from the Gold Trust on Wednesday as gold prices started to bounce despite the closure of the Shanghai Gold Exchange until 25^th February [Thursday next week]. The holdings of the SPDR gold ETF are at 768.263 and at 167.03 tonnes in the Gold Trust. As we said yesterday, “We expect support to be really tested for the next week.” We would emphasize that while this period may see a low point in the gold price this does not reflect a dwindling demand for gold. It only reflects the temporary closure of the Chinese gold market and the holding back of demand in India until the budget is announced in India on the 28^th February.

At that time we will see if a lowering of gold import duties from 10% to 2% will take place. Expectations are very high that this will happen as the current account of the Balance of Payments is reducing heavily because of the oil price falls. We believe that Indian imports of gold and wholesale stocks within the country are being allowed to run down in anticipation of potentially better margins for the industry and greater demand from the retail sector.

On top of that, though longer term, India’s growth rate is expected to accelerate in the months and years to come. This will increase the wealth of the gold buying Indian middle classes. We therefore expect gold demand to gently accelerate over time from there. [Subscribe to www.GoldForecaster.com & www.SilverForecaster.com].

In our opinion, the Technical picture for gold remains to the upside despite the heavy falls seen so far in 2015. Support showed itself in the last day after the Fed minutes indicated that rate rises may well be delayed as international factors alongside a stronger dollar gives cause for a delay. A strong dollar in itself is a tightening factor giving rise to the reverse of the J-curve, which is detrimental to the U.S. trade deficit.

Silver– The silver price showed itself keen to rise as an acceleration of purchases was seen as gold started to rise yesterday. Should gold show strength at these levels we expect the silver price to sprint ahead of gold in percentage terms.

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Regards,

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