Gold & Silver Market Morning

Gold Today – The New York gold price closed at $1,381.60 up $9.40 on Friday in New York. Asia took it up to $1,384 ahead of London’s opening. The gold price was Fixed in London at $1,379.00 up $9.00. In the euro, it Fixed at €992.372 up €5.909 as the dollar continued to weaken to $1.3896: €1. Ahead of the opening in New York gold stood at $1,378.70 and in the euro at €992.83.

Silver Today – The silver price closed at $21.41 up 24 cents in New York. Ahead of New York’s opening, it was trading at $21.40.

Gold (very short-term)

We expect the gold price to consolidate with a stronger bias, today in New York.

Silver (very short-term)

We expect the silver price to consolidate with a stronger bias, today in New York.

Price Drivers

The gold price is likely to build strength as it approaches $1,400, which will mean a pausing or marking time for now. But it may well get closer to $1,400 as it does so.

There were purchases into of the SPDR gold ETF [GLD] of 3.297 tonnes but none into the Gold Trust, on Friday, which left their respective holdings at 816.593 tonnes and 165.14 tonnes. The purchase was did impact the gold price, as it rose. If the buying continues at these levels we would then see U.S. demand come in as a positive factor on top of the removal of U.S. sales of gold. [For more on this, subscribe to www.GoldForecaster.com and www.SilverForecaster.com and visit www.StockbridgeMgMt.com to hold gold out of reach of potential confiscation] The dollar started the week at over $1.39: €1 and could weaken further.

As you know we are perhaps the only people forecasting a fall in the Yuan ahead of its full convertibility and internationalization as a reserve currency. Last week the Yuan’s trading band was widened to 2% from 1% and the Yuan touched a low of 6.17 to the dollar. The widening means that we can expect the Yuan to fall further. All bets to date, on the Yuan, are for it to rise against the dollar. While the lowering of the Yuan is the intention of the People’s Bank of China, disappointing data and the prospect of defaults in bond markets are reinforcing their efforts. It seem the Chinese authorities are adept at using what seem to be ‘normal’ market conditions [such as allowing defaults for the first time] to pursue their interests in other areas. As you know a weakening Yuan means higher Yuan gold prices, which encourages further investment in gold. If you believe developed world financial authorities are manipulating markets to suit themselves, you ain’t seen nothin yet! China has far more tools to do so and uses them. They also want the Chinese investor to own gold, long term.

While the media is expected to keep your eyes in the Ukraine/Crimes story, when you ‘net out’ the economic weapons of each side it appears that it will have an almost neutral impact on the gold price.

Silver – The silver price is likely to keep following the gold price, ‘in tandem’ this week.

Regards,