Silver Market Morning: Oct-10-2016 -- Gold and silver starting to bounce?

Gold Today –New York closed at $1,254.30 Friday after the previous close of $1,268.60. London opened at $1,263.00.

- The $: € was stronger at $1.1174: €1 from $1.1199: €1 Friday.

- The Dollar index was stronger at 96.71 from 96.23 Friday.

- The Yen was stronger at 103.16: $1 from 103.62: $1 Friday against the dollar.

- The Yuan was weaker at 6.7010: $1 from 6.6895: $1 Friday.

- The Pound Sterling was heavily weaker at $1.2380: £1 from Friday’s $1.2728: £1.

Yuan Gold Fix

Shanghai is back from holiday. And they were not prepared to accept New York’s physical free price of $1,254 trading $11 - $13 higher. We remind ourselves that Shanghai is the biggest physical market in the world. It is also the first time Chinese investors and the PB o C has had the opportunity to react to the Yuan being one of the world’s leading currencies as one of those making up the SDR. In addition let’s also remind ourselves that there is no love lost between the U.S. and China as China is a separately developing ‘empire’ to that of the developed world.

We note how Thailand acceded to pressure from China on one of the Chinese dissidents and is sending him back to China. We have long made the point that pressure from Chinese reaches throughout Asia, including Singapore, where some believe their gold is free from potential interference from all other nations. Not so!

With the U.S. closed for Columbus Day pricing power lies in London and Shanghai.

LBMA price setting: The LBMA gold price setting was at $1,262.10 against Friday’s $1,265.50. The gold price in the euro was set at €1,130.21 against Friday’s €1,131.88.

Ahead of the opening of New York the gold price was trading at $1,259.75 and in the euro at €1,129.01. At the same time, the silver price was trading again at $17.73.

Silver Today –The silver price fell to $17.32 at New York’s close Friday from $17.50, Thursday.

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

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

Price Drivers

With the ‘Golden Week’ out of the way now this week should see the power of China’s pricing gold. If China had decided that the $1,250 area is where the price would be prices would have fallen and buyers would have held back from buying. But the consensus was that prices were too low and they piled in. On top of that, they would have seen the publication of the SPDR statistics on Friday and seen the heavy physical buying that came in during the day. Combine the two and we see that physical buying eventually dominated ‘paper’ gold selling. This is an important feature for the gold price in the future. It tells us when good physical demand comes in COMEX prices will follow and cannot dominate in such a market. But let that physical buying slip and COMEX will sell ‘paper’ gold.

But the most important feature in the gold market will come from China as it can now afford to be more open internationally and in the gold market exerting a greater impact on the gold price. Subscribe - GoldForecaster.com Have we seen the bottom in the gold price? The resurgence of ETF buying in the U.S. on Friday is certainly the opinion of some large institutions.

Repeat: This is what we think at Gold Forecaster and Stockbridge Management Alliance Ltd? We see the price very close to the Technical targeted bottom. We do see current price areas we see as a major buying opportunity.

You are welcome to contact us at admin@stockbridgemgmt.com should you wish to buy physical gold in forms that are dealable all over the world and we can hold them for you in a robust manner that, we feel, removes the threat of being confiscated. We’re the only storage company that offers that!

Gold ETFs – There were massive purchases into the SPDR gold ETF of 11.273 tonnes as some investors read the $1,250 area as the bottom in the gold price! There was no change in the holdings of the Gold Trust, leaving both their respective holdings at 959.902 tonnes and 227.23 tonnes.

Since January 4^th this year, the holdings of these two gold ETFs have risen by 386.153 tonnes.

Silver – Silver prices should resume following the gold price. As we see gold price bounce, we do expect to see silver prices bounce more.

Regards,

Julian D.W. Phillips

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

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