Gold & Silver Market Morning

Gold Today – The New York gold price closed at $1,350.30 up$12.90 on Thursday in New York. Asia held it at that level ahead of London’s opening. The gold price was Fixed in London at $1,348.25 up $14.75. In the euro, it Fixed at €971.222 down €0.717, barely changed again, as the dollar stood at $1.3887 over 1% weaker. Ahead of the opening in New York gold stood at $1,348.40 and in the euro at €970.91.

Silver Today –The silver price closed at $21.47 up 30 cents in New York. Ahead of New York’s opening, it was trading lower at $21.35.

Gold (very short-term)

Gold will continue to consolidate, today in New York, but reflect the weakening dollar.

Silver (very short-term)

Silver will continue to consolidate, today in New York.

Price Drivers

We have heard from the Fed that growth is moving ahead on most fronts in the U.S. but it remains subdued. The recent numbers have been disappointing due to the weather, but the Fed needs to see that as the weather improves so do the numbers. Initial reports are that the weather cannot be blamed, so we wait and see, like the Fed.

What we have not seen in the press is any mention that is growth is sliding and the Fed needs to slow or halt the ‘tapering’ how the market will react. As this possibility has not been factored in we would expect it to surprise and disturb the markets. Just as when ‘tapering’ was delayed it got markets in a froth, so we would expect the same to happen if ‘tapering were ‘paused’.

With Europe expecting extended low inflation, for a long time, the threat of deflation there is real. Mario Draghi dismisses this but the markets are not so sanguine. The E.C.B. kept interest rates at current levels, which saw a strengthening of the European currencies and a hefty 1% fall in the U.S. $. We expect the dollar to continue weakening.

Across in India the legal gold imports since October last year, have been higher an annualized 456 tonnes. In summary, last year would have seen imports of 1,200 tonnes had it not been for the restrictions placed on imports last August. As it was, they reached 825 tonnes. But take the imports after August and the shortfall, annualized, was 744 tonnes. Take away the guesstimate of smuggled gold, of 250 tonnes per annum and the shortfall was 496 tonnes. The cost of smuggled gold is not included in the Current Account Deficit. We cover this in more detail in our latest article being published in our newsletter this week. [Get the fuller, big picture from www.GoldForecaster.com and www.SilverForecaster.com to subscribe and visit www.StockbridgeMgMt.com to hold gold so it can’t be confiscated]

There were no purchases of gold into the SPDR gold ETF [GLD] or Gold Trust, on Wednesday or Thursday which left their respective holdings at 803.704 tonnes and 165.14 tonnes. We again read this as a halt to U.S. gold sales a significant event in the gold market.

Silver – The silver price continues to ride tandem with gold.

Regards,