Silver Market Morning

Gold Today –New York closed at $1,210.30 down $5.40 on Tuesday on NY. Asia held it there as did London where the LBMA Gold price was set at $1,211.10 up $2.60 on yesterday’s level. The euro equivalent stood at €1,113.71 up €0.04. Ahead of New York’s opening, gold was trading in London at $1,207.40 and in the euro at €1,112.61.

Silver Today – The silver price closed at $16.88 down 12 cents yesterday. Ahead of New York’s opening it was trading at $16.83.

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 was a sale of 2.388 tonnes of gold from the SPDR gold ETF and a purchase of 0.04 of a tonnes into the Gold Trust yesterday. The holdings of the SPDR gold ETF are at 733.059 tonnes and at 165.28 tonnes in the Gold Trust. Gold remains sitting on support above the 50-day average and looks like it wants to hold that level, while Asian demand continues to be strong, particularly from India.

The news out of Japan is that it is continuing to deflate despite Abenomics. A most confusing set of items in this conclusion are energy prices. Japan imports 90% of its energy requirements from outside the country. The fall in oil prices counters the weaker Yen, to a large extent. In the U.S. the fall has had a far greater beneficial impact. Falling energy prices are technically deflationary, but at consumer level [Japan is a 60% consumer driven economy] it acts as a stimulus. So we feel it would be wrong to conclude that Abenomics has failed. But for gold investors, the key factor is the Yen, which has lifted gold prices by the extent it has fallen against the dollar. Subscribe through www.goldForecaster.com & www.SilverForecaster.com ]

The dollar picked up overnight to $1.0866 up from $1.0905 and on the dollar index to 97.49 up from 97.24. The distance between interest rates in the Eurozone and Japan continue to be huge with U.S. 2-yr yields in the U.S. at 0.52% and 10-yr yields in Germany at 0.17% and at 0.36% in Japan. The upward pressure on the dollar exchange rate will persist, particularly as U.S. corporations want to borrow in euros and use in dollars. These interest rate differentials also point to market’s economic expectations for the developed world outside of the U.S. While the U.S. is in recovery, the latest numbers point to a fragile recovery, still. Outside of the U.S. use of the word recovery appear to be an exaggeration. So as gold rises in the dollar its rise in other currencies is that much greater.

Silver– The silver price is going to mark time with gold today.

Regards,

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