Gold & Silver Market Morning: Oct-27-2014

Gold Today – The gold price closed at $1,231.20 down $10.30 on Friday. Asia and London held it there until the Fix which was set at.The euro is slightly stronger this morning at $1.2682. The Fix was set $1,230.50 down $10.00 and in the euro at €970.579 down €9.356, while the euro stood stronger at $1.2678. The volumes of gold traded were two sellers selling 36,000 ounces and two buyers buying 28,000 ounces before the pro-rata process kicked in.Ahead of New York’s opening, gold was trading at $1,230.60 and in the euro at €971.46.

Silver Today – The silver price closed in New York at $17.19 up 4 cents, holding as gold slipped. Ahead of New York’s opening it was trading at $17.20.

Gold _{(very short-term)} Gold is likely to consolidate, in New York, today.

Silver _{(very short-term)} Silver is likely to consolidate, in New York, today.

Price Drivers

In New York there were sellers of 4.485 tonnes of gold in the SPDR gold ETF but there was a purchase of 0.82 of a tonne into the Gold Trust on Friday. This did assist the fall in the gold price to $1,230, but this was off the day’s lows. It does look like we are back in consolidation mode today. The holdings of the gold ETFs stand at 745.387 tonnes in the SPDR gold ETF and at 162.22 tonnes in the Gold Trust.This makes over 25 tonnes of gold sold from the gold ETFs in the last week. This is heavy and if it continues at these levels will restrain the gold price. If these sales halt, the support for the gold price remains strong and the price will rise.

You will note that the tonnage dealt at the Fixes is round about 1 tonne a day or less. This is far below the demand supply daily levels of around 12 tonnes a day globally. We believe this makes our point that the market volumes can go east at prices that reflect more accurately demand and supply. Such low prices well suit Asia, which is benefitting from bargain prices as gold flows from west to east.

The talk that China’s growth is slowing is a distraction from the reality of the situation. In China, infrastructure development is slowing as the economy switches from investment-led growth to consumer-led growth. In other words the structures are built now they need to be filled and work. There are still another 500 million Chinese sitting in poverty. For the government to keep its credibility it needs to bring them out of poverty even if they remain in the countryside. It does seem that the process is working though. After all growth above 7% remains double and more, what the west is seeing.

It is affecting the E.U. badly for Germany’s exports to China are slowing, lowering the one source of growth to Germany. As the E.U. continues to slow such slowing in Germany brings down growth levels in the E.U. overall. This makes for more uncertainty and likely economic instability. This points to a weaker euro, something the Fed and the Bundesbank don’t want to see. [Get the bigger picture - Subscribe to www.GoldForecaster.com & www.SilverForecaster.com – to protect against confiscation and penalties -see www.Stockbridgemgmt.com]

Silver– Silver prices appear not to want to fall further currently. www.SilverForecaster.com

Kind Regards,