On Wednesday New York closed at $1,132.70 up $15.00. The dollar was weaker at $1.1122 down from $1.1062 with the dollar Index slightly weaker at 96.50 down from 96.80 on Thursday morning. Asia took the price higher still to $1,138. This morning the LBMA gold price was set at $1,137.95 up $14.75. The euro equivalent was €1,019.53 up €2.28. Ahead of New York’s opening, gold was trading at $1,139.25 and in the euro at €1,019.60 and has since soared well above the $1,140 level and above €1,025. The next major resistance point is seen as being at $1,152.
The silver price closed at $15.26 up 38 cents over Wednesday’s close in New York. Ahead of New York’s opening today it was trading at $15.40 and following in gold’s wake had moved above $15.50 as the New York market opened.
The Fed minutes stated that the conditions needed for a rate hike, ‘were approaching’. Despite the meaninglessness of the statement, there will be a host of translators telling us what this means. Bear in mind that these statements were made before important, but negative factors, came into being including further falls in the oil price. It does appear that oil prices still have some way to fall. The Fed will wait until inflation indicates that it is moving to the 2% level. With oil still falling this is unlikely to happen in the next month. Hence, it appears that September will not see the rate hike. The currency market’s reaction was for the dollar to weaken slightly. We do not believe gold reacted to these minutes, but reacted to the Technical picture as gold broke up through resistance convincingly.
With such a large short position on COMEX and in the physical market the failure to fall is precipitating short covering and demand from Asia with the gold season approaching fast.-
There have been no sales or purchases in either the SPDR gold ETF or the Gold Trust so far this week, leaving the holdings of the SPDR gold ETF at 671.867 tonnes and 161.02 tonnes in the Gold Trust. We are seeing the strong move we forecast yesterday in gold and silver prices.
Silver appears to be defeating the ‘bear raiders’ recovering most of its losses earlier in the week. We were right to expect the silver price to recover and to revert to its riveted place next to the gold price, as gold is firm.