Gold & Silver Market Morning: May 29, 2014

Gold Today – The gold price closed at $1,254.00 down $9.00 on Wednesday, in New York. In Asia the price was the same ahead of London, where it was Fixed at $1,254.00 down $11.25 and in the euro at €921.043 down €7.785 while the euro stood barely changed at $1.3614. Ahead of the opening in New York the gold price was trading at $1,254.00 and in the euro at €920.84.

Silver Today – The silver price closed at $19.05 down 25 cents or 1.5% on Tuesday, in New York. Ahead of New York, silver was trading at $18.91.

Gold _{(very short-term)}

The gold price should consolidate with a weaker bias, in New York today.

Silver _{(very short-term)}

The silver price is should consolidate with a weaker bias, in New York today.

Price Drivers

The fall in the gold price and silver continued confirming that this is the strong move that we have been expecting for some time now. We can also confirm that this fall is not reflecting the fall of the euro as the euro has remained unchanged in the last day. We see that Asia has not followed through with increased demand because of the lower price. This has allowed dealers to let prices slide. Once again there were no reported sales or purchases from the U.S. based gold ETFs as their holdings at 785.279 tonnes in the SPDR gold ETF and at 164.02 tonnes in the Gold Trust. Once shares in the ETFs are bought it is up to its Custodian [in this case HSBC is the Custodian for the SPDR gold ETF] to buy the required amount of gold for the fund. But it does not have to go immediately to the market to buy. It can sell from stock to the ETF, or just wait before entering the market and buy at a lower price, if that falls, as it has done since the purchase of over 8 tonnes of gold on Monday. Any delay in buying would present an opportunity to take a position for itself. This would remove the impact of such purchases on the gold price and leave HSBC with a short sale profit. Whatever happened, the fall in the gold price since Monday ignored the purchase of 8 tonnes of gold then but it may well be that this purchase is yet to reflect in the gold price.

The fall in the gold price shows gold is sitting on support again, but the pattern formed points down in the short-term. With such a Technical picture, speculators are more likely to go short than long at the moment. While Asian demand is not reacting, there is little to lift the gold price this week.

Certainly the demand from China this week has not reacted to lower gold prices. Over in India, the price has dropped back in Rupee terms to a level not seen for over a year because of the gold import restrictions.If there is demand coming from India now after the easing of such restrictions we would think these prices would prompt that to be seen in London soon. Until then we would expect either lower prices or a further consolidation of the gold and silver prices. [For more on this subscribe to www.GoldForecaster.com and visit www.Stockbridgemgmt.com to protect yourself from penalties from holding your gold overseas when it is to be confiscated].

Silver – The silver price is now falling with gold. [More in the www.SilverForecaster.com]

Regards,