Gold and silver market morning: Monetary changes will be huge over next few years

New York closed at $1,145.80 down from $1,156.80 at the close on Thursday but then rose to $1,150 in Asia overnight. The LBMA price setting fixed it at $1,147.75 down from $1,159.00. The dollar Index has risen and now stands at 97.11 down from 97.37. The dollar was weakening this morning as London opened, trading against the euro at $1.0993 down from $1.0931. In the euro the fixing was €1,041.75 down from €1,156.52.

At New York’s opening gold was trading in the euro at €1,041.35 and at $1,147.20 but was then marked down further. The silver price closed at $15.60 down 39 cents on Thursday. At New York’s opening, silver was trading at $15.57.

PRICE DRIVERS

Yesterday saw support damaged with gold falling through that level. The Technicals are now giving an opaque picture. The downside risk appears limited unless gold falls through $1,130.

In the euro the gold price rose to €1,046 ahead of London’s opening so the moves in the gold price remain reflective of currency movements.

The gold price was not even reflecting U.S. demand and supply or the global picture and or traders and speculators, or demand and supply influences. We believe that the dealers adjusting gold prices, to reflect currency moves, remains the dominant influence on the gold price, going forward.

There has been no action in either the SPDR gold ETF or the Gold Trust. The holdings of the SPDR gold ETF are at 694.344 tonnes and 161.99 tonnes in the Gold Trust. This, to us, is confirmation of dealer dominance over the gold price.

The pre-opening fall now we feel are dealers bracing themselves for any sales, not actual physical sales. We have discussed this at length in our newsletter, detailing how this change is structural for the gold price.

While the gold market is struggling to rise the changes on the monetary front are going to be huge and will affect the entire global monetary system over the next couple of years. This stems from the action in exchange rates that we are watching today!

With U.S. GDP growth falling back to 1.5% but consumer spending rising to 3.2% in the third quarter the U.S. economic picture can be read either way. Japan too is giving an uncertain outlook as inflation targets are postponed. The Eurozone’s growth is weakening as is China’s. Overall the global economy is not giving a hopeful picture.

Silver prices will reflect $ gold price moves because the silver price is almost entirely a U.S. dollar price and is not moving with other currencies

Julian D.W. Phillips for the Gold & Silver Forecasters – www.goldforecaster.com and www.silverforecaster.com

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