Silver Market Morning: Aug-4-2016 -- Gold and silver prices consolidating ahead of Carney!

Gold Today –Gold closed in New York at $1,358.10 on Wednesday after Tuesday’s close at $1,364.50.

- The $: € was up at $1.1135 from $1.1197.

- The dollar index rose to 95.67 from 95.09 Wednesday.

- The Yen was weaker at 101.48 from Wednesday’s 101.06 against the dollar.

- The Yuan was weaker at 6.6409 from 6.6291 Wednesday.

- The Pound Sterling was weaker at $1.3297 down from Wednesday’s $1.3301.

Yuan Gold Fix

Shanghai prices saw prices consolidate at lower levels ahead of the Bank of England’s statements today. But the main driver of the day was a correcting U.S. dollar in what we see as a normal market reaction to its recent weaknesses. [More in our newsletters – subscribe below].

LBMA price setting: $1,351.15 after Wednesday 3^rd August’s $1,364.40.

The gold price in the euro was set at €1,213.75 up €4.46 from Wednesday’s €1,218.21.

Ahead of the opening in New York the gold price stood at $1,356.90 and in the euro at €1,219.03.

Silver Today –The silver price closed in New York at $20.41 on Wednesday down from $20.61 on Tuesday. Ahead of New York’s opening the price was trading at $20.32.

Gold _{(very short-term)}

The gold price will react to the Bank of England’s statement, in New York today.

Silver _{(very short-term)}

The silver price will follow gold, in New York today.

Price Drivers

The Bank of England lowered interest rates by 0.25% and said it had scope to do more if needed, including taking the key rate close to zero, they also announced a plan to lend as much as £100 billion ($132 billion) to banks to ensure the measures reach the real economy. In addition, the Monetary Policy Committee will buy £60 billion of government bonds over six months and as much as £10 billion of corporate bonds in the next 18 months. In total, the balance sheet could expand by £170 billion.

The bank cut its growth forecast for next year to 0.8% from 2.3% and lowered its 2018 prediction to 1.8% from 2.3%. The pound dropped to $1.3135 immediately after the statement.

The dollar’s performance is largely going unnoticed as it continues to trade between 95 and 97 on the dollar index. On the basis of its economy’s performance it should be much stronger. On the basis of its Trade balance the dollar should have collapsed long ago, but the Capital accounts as the dominant world power makes it a haven for all other currencies. But this situation is starting to change as its role as the sole currency with which to pay for oil is changing, as is its role as the last resort currency haven. The credibility of currencies as the monetary expression of government is weakening in line with the destabilizing of the monetary world. Gold is not a monetary alternative for many reasons, but it is a vehicle with which to shore up confidence in them, particularly if it can be eliminated as competition to currencies.

Gold ETFs – In New York on Wednesday there were sales of 0.052 of a tonne sold from the SPDR gold ETF but no change in the Gold Trust holdings. This left their respective holdings at 969.648 tonnes and 219.65 tonnes.

Since January 4^th this year, the holdings of these two gold ETFs have risen by 391.683 tonnes.

Silver –Silver prices are more cautious today than gold prices ahead of the Bank of England’s announcement.

Regards,

Julian D.W. Phillips

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

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