Silver Market Morning: Nov-11-2016 -- Gold – more volatility to come. Silver - stable!

Gold Today –New York closed at $1,256.80 yesterday after the previous close of $1,274.50 London opened at $1,262.00.

- The $: € was a tad stronger at $1.0909: €1 from $1.0940: €1 yesterday.

- The Dollar index was a little stronger at 98.64 from 96.45 yesterday.

- The Yen was weaker at 106.51: $1 from yesterday’s 105.40 against the dollar.

- The Yuan was weaker at 6.8141: $1 from 6.8112: $1 yesterday.

- The Pound Sterling was stronger at $1.2577: £1 from yesterday’s $1.2408: £1.

Yuan Gold Fix

Please note that the Shanghai Fixes are for 1 gm of gold. From the Middle Eat eastward metric measurements are used against 0.9999 quality gold. [Please note that the 0.5% difference in price can be accounted for by the higher quality of Shanghai’s gold on which their gold price is based over London’s ‘good delivery’ standard of 0.995.]

As you can see Shanghai did not follow New York down to the $1,250’s area, but held nearly $40 higher in their morning Fix. But when the news of the sales from the SPDR gold ETF came out the price tumbled there too.

In markets as volatile, both ways, as we are seeing now, no conclusions can be drawn, yet.

LBMA price setting: The LBMA gold price setting was at $1,255.65 against yesterday’s $1,280.90. The gold price in the euro was set higher at €1,154.73 against yesterday’s €1,175.14.

Ahead of the opening of New York the gold price was trading at $1,258.00 and in the euro at €1,156.89. At the same time, the silver price was trading at $18.60.

Silver Today –Silver rose to $18.52 at New York’s close yesterday from $18.40, the day before.

Gold _{(very short-term)} The gold price will consolidate with a positive bias, in New York today.

Silver _{(very short-term)} The silver price will consolidate with a positive bias, in New York today.

Price Drivers

Volatility has not finished by a long way! First we saw a Trump Hump, then a Trump Dump! There is nothing yet to establish tomorrow’s realities. Hopes and expectations are all we have to go on.

While, the re-building of the U.S.’ infrastructure is on the cards [with a major cut in Company tax, together with a small 10% tax on repatriated funds from overseas, paid for with debt] we have no doubt that deflation will halt and inflation take its place. But this process will take from two to three years before we see action on the ground.

With China reducing its holdings of U.S. Treasuries together with a hostile Trump accusing it of currency manipulation, we doubt whether China will be a big buyer of the approximately $4-6 trillion required to finance his policies.

In the meantime, we expect the dollar to pull back today, as it is starting to do now. It is important to realize that a strong dollar could well impact the Fed’s decision to raise rates. If it is too strong we doubt we will see a December hike.

After the current market exuberance, both ways, has settled, we expect gold to recover in the short term. Yesterday’s heavy price fall can be attributed to heavy sales of gold from the SPDR gold ETF and the Gold Trust.

We have expressed our views on what to expect from President Trump and how it will affect gold and silver in the latest issue of the Gold Forecaster. Subscribe - GoldForecaster.com To ensure you can benefit from the future higher gold prices we will see then, you need to hold it in a manner that makes sure it can’t be taken from us. Contact us at admin@stockbridgemgmt.com to buy physical gold in a way that we feel, removes the threat of it being confiscated. We’re the only storage company that offers that!

India withdraws Rs.500 and Rs.1,000 banknotes - The withdrawal of high denomination banknotes in an attempt to prevent the ‘black money markets’, will lead to gold taking their place. Indian do not trust government or their bureaucrats and will continue to hide information from government and the banks. These notes helped to do that, so gold will now act as a high value money in the ‘black money markets.

Gold ETFs – There were sales of 13.345 tonnes of gold from the SPDR gold ETF and sales of 3.01 tonnes from the Gold Trust yesterday, leaving their respective holdings at 941.681 tonnes and 224.98 tonnes.

These sales of gold from the SPDR gold ETF appeared to have been made by Druckenmiller who closed his positions to bet of growth in the U.S. With this big holder out of the way it appears that the selling may come to an end, opening up the way for a price bounce.

Since January 4^th this year, the holdings of these two gold ETFs have risen by 365.652 tonnes.

As with the direction of the gold price yesterday, so with the gold ETFs. These major sales pulled gold prices back to support.

Silver – Silver is remarkable in that it is moving far less than gold prices and looking solid at higher levels.

Regards,

Julian D.W. Phillips

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

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