Gold & Silver Market Morning: May 27, 2014

Gold Today – The gold price closed at $1,292.00 down $2.00 on Friday, in New York. Today the markets re-open after their day off yesterday. In Asia the price was pushed back to $1,282 ahead of London, where it was Fixed at $1,283.00 and in the euro at €940.478 while the euro stood unchanged at $1.3642. Ahead of the opening in New York the gold price was trading at $1,283.10 and in the euro at €940.340.

Silver Today – The silver price closed at $19.30 down 10 cents on Friday, in New York. Ahead of New York, silver was trading at $19.27.

Gold _{(very short-term)}

The gold price is soon to make a strong move either way, in New York, maybe this week.

Silver _{(very short-term)}

The silver price is soon to make a strong move either way, in New York, maybe this week.

Price Drivers

As Asia was closing and London opening the gold market was hit by traders trying to break the gold and silver prices down and pushed gold to $1,282 and silver to $19.27. The timing indicated speculators were making the play, not physical sellers as markets were at their quietest, not the time for sellers to maximize their proceeds. We have to watch every move now to see if such moves are ‘dummy passes’ or the strong move we have been waiting for, for the last month and more. It is time to expect volatility, because when a market is so balanced, small amounts of demand or supply can have a disproportionate impact on prices. This allows such amounts to turn the price around quickly. This happens until the market decides on a sure direction, then the herd runs that way. So brace yourselves!

After the election results in Europe and the U.K. over the weekend, the politicians are calling for growth and reform. This tells us that the pressure is on Marion Draghi now, to do all he can to be seen to be promoting growth through stimulus and a lower euro exchange rate. June promises a lot of action in global financial markets as a result. The Stock Exchanges in Europe are climbing fast not because of hope in the future, but because they know that even dividend returns will justify turning away from fixed interest markets, just as we have seen in the States [see the next issue of the Gold Forecaster [www.GoldForecaster.com]. Eurozone Stock Exchanges may well keep doing this right into and through June.

Even in the States the Treasury and bond markets are pricing in the expectation that interests rates will not rise to over 4% as they have in strong markets in the past. They are pricing in an overnight rate not beyond 3.3% telling us that growth for the long-term will not return to the pre-2007 levels.

As the States had a holiday yesterday the holdings of the SPDR gold ETF and the Gold Trust stand at 776.893 tonnes and 164.02 tonnes. Keep an eye on these closely!

Silver – The silver price is waiting for gold price [More in the www.SilverForecaster.com]

Regards,