Silver Market Morning

Gold Today –New York closed at $1,195.90 down $8.60 on Monday in NY. Asia held it there then London started to lift it ahead of the LBMA Gold Price. The LBMA Gold price was set at $1,197.70 down $5.55. The euro equivalent stood at €1,120.29 up €1.46 against a weaker $: € rate of $1.0689 against yesterday’s $1.0753. Ahead of New York’s opening, gold was trading lower in London at $1,198.70 and in the euro at €1,122.22.

Silver Today – The silver price closed at $15.99 down 27 cents on Monday. Ahead of New York’s opening it was trading at $16.07.

Gold _{(very short-term)} The gold price will continue to consolidate, then make a strong move either way, in New York today.

Silver _{(very short-term)} The silver price will continue to consolidate, then make a strong move either way, in New York today.

Price Drivers

The moves in the gold price were again dominated by dealers moving prices around with the moves in currencies. They are rising in the euro and down in a stronger dollar where the dollar index now stands at 98.24 up from yesterday’s 97.52. These moves are part of the consolidation pattern we are experiencing. What is different is the fact that gold is not moving with the euro or the dollar but still reflecting the value of the currencies independently. This particular consolidation is a long one and will continue to be so until a major monetary event happens. There are several of these that we are all aware of but they have yet to come to fruition. We have no doubt they will happen soon with several happening in 2015. The trouble is they will catch the bond, equity and housing markets by surprise. Markets like to cling onto a positive outlook and ignore negative signs until they become realities. For instance, the Fed is very worried that no matter what they say, once they start to raise interest rates, markets will become neurotic and discount much higher rates. This has the potential to burst several bubbles that are already looking vulnerable.

As we have said for nearly a week now the trading ranges of the gold price have become very tight ahead of a strong move either way. With strong Asian demand being seen, without chasing prices up, there appears to be little downside risk. But if a monetary event is seen, the upside potential is very large. The question is, “When will this happen?” We don’t know but have prepared our own positions ready for when they happen, because we may miss a good part of future moves if we wait too long.

There were sales of 0.04 of a tonnes of gold from the SPDR gold E.T.F. but no change in the Gold Trust on Monday. The holdings of the SPDR gold ETF are at 739.065 tonnes and at 165.28 tonnes in the Gold Trust. Subscribe www.goldForecaster.com

Silver– Silver’s price will always be more vulnerable than gold to big moves. It is the nature of a smaller market with less liquidity and a more professional investor class. But it will continue to have a far greater upside potential alongside a greater downside potential than gold. It has completely different monetary characteristics and yet continues to be treated as a monetary metal riveted to moves in the gold price. Subscribe www.SilverForecaster.com ]

Regards,

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