Silver Market Morning: Aug-26-2016 -- Gold and silver trying to rise from very low levels!

Gold Today –Gold closed in New York at $1,322.50 on Thursday after Wednesday’s close at $1,324.30. London opened at $1,326.75.

- The $: € was at $1.1293 from $1.1276 yesterday.

- The dollar index was at 94.63 from 94.70 yesterday.

- The Yen was at 100.45 from yesterday’s 100.37 against the dollar.

- The Yuan was weaker at 6.6687 from 6.6560 yesterday.

- The Pound Sterling was at $1.3200 from yesterday’s $1.3217.

Yuan Gold Fix

We were right when we said that there was no physical content to the fall in the gold price. Not only did silver prices not fall nearly as much as gold prices did, but the sale of less than 2 tonnes from the SPDR gold ETF was too small an amount to move the gold price let alone knocking it down this far.

LBMA price setting: $1,324.90 after yesterday’s $1,324.50.

The gold price in the euro was set at €1,173.20 up €0.56 from yesterday’s €1,172.64.

Ahead of the opening in New York the gold price stood at $1,327.35 and in the euro at €1,175.48.

Silver Today –The silver price closed in New York at $18.56 yesterday down from $18.55 Tuesday. Ahead of New York’s opening the price was trading at $18.68.

Gold _{(very short-term)}

The gold price will continue to consolidate at lower levels, in New York today.

Silver _{(very short-term)}

The silver price is expected to consolidate at lower levels waiting for gold to move, in New York today.

Price Drivers

The gold price, we feel is now forming an attractive short term pattern that should be positive for gold. The gold price fall was an ‘engineered fall’ that did not represent the physical state of the market. Here we are in the last week of August, ahead of the ‘gold season’. This is one of the last weeks when the gold ‘bears’ could do this. Before the fall the Technical picture moved to a point where a strong move was possible either way. This was, with hindsight an invitation to them to do this.

The reason the gold price fell like this was that high speed traders went wild and dumped $1.5 billion worth of gold futures into the market in one minute. In a ‘pure’ market that reflected demand and supply of physical gold, such trading would not have affected the physical price because of this. Because COMEX involves such high volumes of paper gold with contracts that would never be allowed to come to delivery, COMEX does move prices. What is not commonly known is that if a buyer or seller of gold futures wishes to take or give delivery of gold, he has to notify COMEX officials. If he doesn’t and at the end of the contract demand delivery, he will be paid in cash the profit he achieved or pay the loss he incurred. He will have no right to delivery.

The only way that COMEX paper traders will not affect the gold price is for the physical market in Shanghai to ignore COMEX gold prices. Many look at the stocks in COMEX vaults as a sign that COMEX gold markets will fail, but should COMEX find physical stocks too low, they need only to refuse to accept contracts that want delivery.

But if London and Shanghai don’t ignore COMEX and adjust their prices to COMEX levels, COMEX prices will continue to influence prices the way they are doing now.

But high frequency traders are making paper trading a joke of the gold markets [and other markets]. They are the worst kind of speculators, able to jump ahead of any others in massive volumes.

Gold ETFs – In New York on yesterday there were sales of 1.781 from the SPDR gold ETF but a purchase of 0.30 of a tonne into the Gold Trust. This left their respective holdings at 956.588 tonnes and 224.90 tonnes.

Since January 4^th this year, the holdings of these two gold ETFs have risen by 382.373 tonnes.

Silver –Silver prices rose 1 cent yesterday confirming that silver prices were not affected by the ‘paper bear raid’.

Regards,

Julian D.W. Phillips

GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance [Gold Storage geared to avoid its confiscation]

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