Silver Market Morning: Sep-30-2016 -- Gold and silver hold at support!

Gold Today –New York closed at $1,321.40 yesterday after the previous close of $1,322.90. London opened at $1,325.

- The $: € was stronger at $1.1173: €1 from $1.1223: €1 yesterday.

- The Dollar index was stronger at 95.82 from 95.45 yesterday.

- The Yen was stronger at 101.21: $1 up from 101.56: $1 yesterday against the dollar.

- The Yuan was stronger at 6.6720: $1 from 6.6734: $1 yesterday.

- The Pound Sterling was weaker at $1.2956: £1 from yesterday’s $1.3024: £1.

Yuan Gold Fix

Look at the difference between New York’s close and Shanghai’s p.m. fix! With the Yuan becoming one of the currencies in the SDR tomorrow we are closely watching to see if there is any change in a range of Chinese activities.

Many feel that the Yuan has done little internationally so far, so why should it change now? We feel, as you know, that China has been holding back until this moment came. From now on we will see the action in the currency, etc. going forward.

Shanghai kept gold prices at the day before’s level ignoring New York. What next?

LBMA price setting: The LBMA gold price setting was at $1,327.90 against yesterday’s $1,320.85.

The gold price in the euro was set at €1,188.49 against yesterday’s €1,177.39.

Ahead of the opening of New York the gold price was trading at $1,324.25 and in the euro at €1,186.92. At the same time, the silver price was trading again at $19.33.

Silver Today –The silver price rose slightly to $19.07 at New York’s close yesterday down from $19.16, Wednesday.

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

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

Price Drivers

With the Shanghai gold exchange closed for the weekend gold prices in London are trying to follow New York from the front as they are pulled back ahead of New York’s opening. But once again currencies are dominating gold prices.

Meanwhile there is a potential crisis in Europe that is disturbing markets, Deutsche Bank and Commerzbank. The markets are telling us that there is a real crisis looming. The media and these banks tell us that all is well. The reality is something that we cover more in this week’s Gold Forecaster as we cannot do it justice here. Of greatest concern is the possibility that Deutsche Bank may suffer a $14 billion fine when it has current capital $18 billion. Nothing is set in stone and it is clear that the German government cannot afford to let Deutsche bank fail. The ‘ripple’ effect would be horrendous on the developed world in its entirety. But the markets are rattled when they see hedge funds leave the bank! Subscribe - GoldForecaster.com

An issue that is being ignored throughout the world is the use of artificial intelligence to destroy jobs. In less than a decade this destruction should hit up to 50% of jobs in the developed world and there isn’t even a discussion as to how these unemployed people will be looked after. It’s the stuff revolutions were made on in the past! In a world where the rise of China, alongside this work force destruction, is a persistent undercurrent on a globe where developed world growth is insufficient, this is perhaps the most pernicious set of factors facing the young and next generation. Its progress is unstoppable.

The next intractable problem under questioned is the benefits inflation will bring. Central banks are striving to reach a 2% target level for inflation. The main benefit is that it should mean that deflation has ended. But, as we see in Japan, the aging population is thrifty and unlikely to go out and spend their savings. More likely they will move it into items that can benefit from inflation, such as gold. Higher inflation, therefore, will not induce economic growth.

Gold ETFs – There were no sales or purchase of gold from the SPDR gold ETF or the Gold Trust yesterday, leaving their respective holdings at 949.139 tonnes and 226.68 tonnes, still.

Since January 4^th this year, the holdings of these two gold ETFs have risen by 375.517 tonnes.

Silver – Silver prices have changed direction, following gold prices as the turnaround begins.

Regards,

Julian D.W. Phillips

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

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