Silver Market Morning

Gold Today –New York closed at $1,202.50 up exactly $10.00 on Wednesday in NY. Asia took it up to $1,205 with London holding it there ahead of the LBMA Gold Price. The LBMA Gold price was set at $1,204.60 up $14.75 on Wednesday’s level. The euro equivalent stood at €1,129.22 up €5.55 against a weaker $: € rate of $1.0673. Ahead of New York’s opening, gold was trading higher in London at $1,208.00 and in the euro at €1,125.71.

Silver Today – The silver price closed at $16.32 up 12 cents on Wednesday. Ahead of New York’s opening it was trading at $16.49.

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

The consolidation continues around a strengthening, then weakening, dollar. With the dollar index now at 98.39 down from 99.27 and the euro up at $1.0669 from $1.0581 yesterday it was the turn of the dollar to retreat.

The impact of the Eurozone’s quantitative easing is being clearly seen in negative yields on bonds below 8 years and not only in Germany. Even Spain now sees yields on 6-month bonds in negative territory. It is also clear that it will take more than being paid to borrow money to produce economic growth. As Jack Lew, Treasury Secretary, said yesterday, it will take ‘policy’ [from government] to trigger growth of believable proportions in the Eurozone. Much more can be done, but the political structures of Europe are working against that. So expect the euro to keep slipping for many good reasons, over time. It would appear from the comments of Jack Lew that the U.S. is being sanguine about this, but warned that policies designed to weaken a currency are not acceptable to the U.S. We ask, isn’t the Eurozone doing just that? Hence when we see dollar exchange rates falling we wonder. “Is this intervention?”

For gold the net result is this consolidation around $1,200. It will take an important event for this to change. Looking ahead there are so many potential such events, such as the departure from the euro of Greece, China making the Yuan freely convertible, as well as one of the higher risks the I.M.F. have warned about yesterday for the global economy. They warned of a “super taper tantrum” once U.S. interest rates start to rise. These may be most keenly suffered by the ‘shadow’ banking system such as life insurers as reactions to rising rates from low stable rates impact. Overall the atmosphere is conducive for holding gold against these risks. But, only Asia is really buying gold in huge amounts currently.

The negative impact of artificial intelligence on employment and the shift of wealth and manufacturing to the east are not discussed in the media, but remain the most devastating forces on developed world growth. These are long term influences and increase the developed world economy’s vulnerability to an event that will be positive for the gold market.

There were no purchases or sales into or from the SPDR gold E.T.F. or the Gold Trust yesterday. The holdings of the SPDR gold ETF are at 736.081 tonnes and at 165.28 tonnes in the Gold Trust. Subscribe through www.goldForecaster.com

Silver– Silver is waiting for direction from gold still. Subscribe www.SilverForecaster.com ]

Regards,

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