Silver Market Morning

Gold Today –New York closed at $1,184.20 down $1.30 from yesterday’s NY close. Asia lifted it to $1,187.60. The LBMA Gold price was set at $1,181.25 up $2.00. The euro equivalent stood at €1,097.92 up €0.09. Ahead of New York’s opening, gold was trading in London at $1,193.30 and in the euro at €1,107.42.

Silver Today – The silver price closed at $16.65 down 6 cents. Ahead of New York’s opening it was trading at $16.73.

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 have been no sales or purchases gold from or to the SPDR gold ETF but a purchase of 0.21 tonnes into the Gold Trust yesterday. The holdings of the SPDR gold ETF are at 737.237 tonnes and at 164.92 tonnes in the Gold Trust.

The dollar is stabilizing against the euro too at $1.0745 and the dollar index at 98.34. The gold and silver prices remain in a consolidation pattern.

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The world is expecting a deal over the nuclear issue between Iran and the U.S. today. As we all know this issue is not simply about the nuclear issue. The U.S. foreign policy has not yet embraced the religious war in the region yet, as is clear by their rather confused policies. The religious war in the region has moved up a gear in the Yemen and more may follow. Iran is a counter to ISIS and the West can see no clear role for them on these issues. For gold investors the reason this is important is that if Iran’s 3 million barrels per day, currently held back, comes onto the market the oil price should drop to between $30 - $40, or less, for some time to come. If a deal is achieved there is no detail as to when Iran’s oil will be back in the market, but it is unlikely that Saudi Arabia will make room for them by cutting production. While gold is only indirectly influenced by the oil price, such a fall in the oil price will be dramatic so lead to gold rising, we feel.

In themselves, further falls in the oil price are a growth bonus for consumers. But consumers are not inclined to spend this but save it. Japan is demonstrating this at the moment, despite being a prime beneficiary of low oil prices. While the weakness of the yen diminishes this benefit, the Yen’s weakness should have been a huge boost to the Japanese consumer. And yet consumers in Japan are still not opening their wallets. So deflation remains a worry. It has moved to the point where a rise in inflation could lead to an overall liquidity crisis in Japan. This would be gold positive on a broader global front.

Silver– The silver price is mimicking gold as usual and waiting for direction from gold.

Regards,

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