Gold & Silver Market Morning: January 23, 2014

Gold Today –New York saw gold fall to $1,237 then took it down to $1,234 in thin trade in both markets. Ahead of the opening in London it recovered to $1,238. The dollar traded at $1.3548: €1 then. London traded up from $1,238 until the Fixing, which was set at $1,244.25 up $4.75 on Wednesday. In the euro, it Fixed at €912.876 down €3.095 reflecting a weaker dollar which stood at $1.3632: €1.The Fix was set quickly, showing us that the volumes were thin in the Fixing. Ahead of the opening in New York gold stood at $1,245.15 and in the euro at €913.27.

Silver Today –The silver price vacillated around $19.80 to $19.77 at the close in New York and Asia before London’s opening. Ahead of New York’s opening, it was trading at $20.10.

Gold _{(very short-term)}

We expect a positive bias to the gold price today, in New York.

Silver _{(very short-term)}

We expect a positive bias to the silver price today, in New York.

Price Drivers

Yesterday saw 1.2 tonnes of gold sold from the SPDR gold ETF [GLD] but none sold from the Gold Trust gold ETFs leaving their respective holdings at 795.894 tonnes and 161.37 tonnes. These sales restrained the gold price from its expected rise, but little more as trade in gold bullion was thin.

The gold price remains well supported at these levels, but overhead resistance is weakening visibly. The tone of the gold market remains good despite the U.S. equity markets remaining strong. Today’s thinking is that, when the U.S. equity markets rise, gold should fall. But this is not happening, as both look good. [Find out more from www.GoldForecaster.com and www.SilverForecaster.com to subscribe to our newsletters and visitwww.StockbridgeMgMt.com to hold gold so it can’t be seized]

A point that is being overlooked in the U.S. as their equity markets remain strong is that while the recovery is moving slowly forward the impetus is coming from two sources. The first is lowering gas prices [expected to bottom around $80] with U.S. self-sufficiency in energy well on the way and the disturbing fact that interests rates are at all time lows. So investors are buying better returns in the equity market than they can get in fixed interest rate markets, not on the expectation of robust growth. The dangers this situation brings is illustrated by the expectation that when interest rates rise, equity and fixed interest rate markets will fall. If deflation, as warned by the IMF is on the way, the classic government counter to that is to lower interest rates. Well, with interest rates already at the bottom, they can’t. Consequently the ‘big’ picture is not a healthy one for the developed world economy. But gold is now not rising with the dollar and U.S. equity markets because of this, but because it is global in nature and global demand overall remains robust, with more good news on the way!

Silver –The silver price true to history continues to move in tandem with gold. That’s why, what affects gold affects silver prices too.

Regards,