Gold & Silver Market Morning

Gold Today –New York closed at $1,228.00 down$2.40 as the euro continued slipping. In Asia the gold price slipped to $1,226.60 down $1.10 with the euro at $1.1765 ahead of London’s opening. The Fix saw the gold price set at $1,235.25 up $6.50 and in the euro, at €1,055.408 up €10.419 while the euro was half a cent weaker at $1.1704. Ahead of New York’s opening gold took off and was trading in London at $1,257.00 and in the euro at €1,074.86.

Silver Today – The silver price closed at $16.83 down 18 cents. Ahead of New York’s opening it was trading at $17.14.

Gold _{(very short-term)} The gold price will consolidate with a positive bias, in New York, today.

Silver _{(very short-term)} The silver price will consolidate with a positive bias, in New York today.

Price Drivers

There were sales of 0.23 of a tonne of gold from the SPDR gold ETF but purchases of 0.42 of a tonne of gold into the Gold Trust yesterday. The holdings of the SPDR gold ETF are at 707.591 and at 163.04 tonnes in the Gold Trust.

With unexpected interest rate cuts in India prompting fears of less than expected growth, financial market moods indicated fears of a global downturn. What this does is to indicate uncertainty over the direction of the global economies at least. Interest rate rise expectations will be postponed until more confidence and the needed back-up data is in place before rate rises are seen. Will this affect the gold price? Uncertainty will always feed demand for gold.

The consolidation process continued until mid-morning in London, when after the Fix the euro started to tumble again and gold roared in the dollar too. We did expect a bit more of a consolidation, but the growth on uncertainty sparked by the Swiss National Bank removing the cap on the Swiss Franc against the euro, set the cat among the pigeons with expectations of a brutal fall in the euro now. The Swiss have been determined to keep the Swiss France capped because of the danger of a loss of Swiss trade competitiveness with its main trading partner, the Eurozone. This will now be taken as a capitulation by the SNB stating to all, that the euro and the developed world monetary system is suffering a structural fracture. The Swiss Franc is now nearly 15% weaker than at the start of the day![Subscribe to www.GoldForecaster.com & www.SilverForecaster.com]

We believe we have now past ‘peak gold’ in terms of newly mined gold production. Scrap sales, which are the only other component of supply has fallen off with lower prices. The two total around 4,200 for 2014 and will start to decline in 2015. On the other side of the equation Asian demand [including China] took off more than 3,300 tonnes of this in 2014. This leaves the rest of the world with less than 900 tonnes supply, an amount we believe will be insufficient to meet their future demand as uncertainty and financial stress increases in 2015.

Silver– The silver price is running as forecast. www.SilverForecaster.com

Regards,