Gold & Silver Market Morning: Nov-26-2014

Gold Today – The gold price closed up at $1,200 in New York on Tuesday.London took it down to $1,196 just ahead of the Fix. At that time it was trading in the euro at €960.41 down €6.53, while the euro stood slightly stronger at $1.2450.

Silver Today – The silver price closed in New York at $16.60. Ahead of New York’s opening was trading at $16.55.

Gold _{(very short-term)}

The gold price will consolidate around $1.200 in New York, today.

Silver _{(very short-term)}

Silver will consolidate alongside gold, in New York, today.

Price Drivers

In New York, there were no sales or purchases from or to the SPDR gold ETF or the Gold Trust yesterday. The holdings of the SPDR gold ETF were at 720.914 and at 160.00 tonnes in the Gold Trust.

There is talk that the E.C.B. may consider buying gold as part of its program to spur inflation. Quite frankly, this does not make sense. We see Russia buying gold to boost the credibility of the Ruble. Yes, by issuing euros to buy gold would boost money supply and so inflation but it would be seen as a direct weakening of the euro were it not for the vast quantities of gold needed to have a real effect on inflation. Such quantities are not available. Further, the action would drive up gold prices, which would likely fall back once the buying stopped. In addition, such actions would endorse gold as money of last resort at the expense of the basic credibility of the euro.

At the pre-meeting meeting of O.P.E.C. no agreement on cuts in oil production were made. Today, we see oil prices falling further below $78 for Brent and $73 for West Texas. This lays the foundation for the meeting tomorrow. To us it is seen as a direct attack on U.S. oil production rises through ‘fracking’. Russia has said it can tolerate low prices for some time and other producers realize the future consequences of the structural change in the oil market and are fighting it. We, therefore, see oil prices holding these low levels until the battle is won.While such low prices are acting as a mild stimulus for the consumer it is exposing the dollar market to an excess of dollars. Where will these go? They are going into equities and Treasuries and taking these markets to levels not justified by their fundamentals. We are now seeing a mercurial, volatile 2015 coming up.

The opposition party in France has joined the chorus on repatriation. Germany, the Netherlands, potentially Switzerland are also in the choir. This is not simply an emotional stance, but has several underlying merits. In our latest issue of the Gold Forecaster, we cover this issue in depth.[Get the bigger picture - Subscribe to www.GoldForecaster.com & www.SilverForecaster.com – to protect against confiscation and penalties -see www.Stockbridgemgmt.com]

Silver– The silver price will follow gold.www.SilverForecaster.com

Kind Regards,