Julian Phillips’ latest take on gold and silver market activity and movements in the big SPDR gold ETFs
The economic news out of the US was not good as a drop in durable sales and the awareness that the low oil price is hitting the main cause of the rise in U.S. employment as the ‘fracking’ oil industry is having to pull back. Add to this the downturn in the global economy and the prospects of an interest rate rise at the half year, this year appears slight. Some have pushed out this prospect to 2016.
The gyrations of the euro and dollar are impacting the gold price too up in one and barely changed in the other. We note that Asia is not chasing prices but buying below $1,300, which is why the rise has slowed over the last few days.
Germany needs a weak euro to stay competitive globally Greece can’t pay its debt and has to hold its elected position. If Greece were a corporation, an individual or a Municipality, court protection from creditors would spring into action. This is missing among Eurozone member states. So the somewhat Neanderthal fight between debtor and creditors has to take place. If the borrower was unable to handle its debt, why was it lent so much? Where this responsibility is apportioned will decide the outcome of Greece’s debt position, but the battle will be bruising. Whether it is a partial write-off, a lowering of interest rates, or an extension of maturities, or all at once, we are certain that a compromise will be reached now. Perhaps it was this realization that caused the euro to recover so strongly up now to $1,1354 up from below $1.12.
The Netherlands has denied that it bought over 9 tonnes of gold last month. If it were true, then you will hear a great deal more from us on this subject.
Markets and ETF purchases
New York closed yesterday at $1,294.70 up $14.30. In Asia gold slipped to $1,289. The Fix saw the gold price set at $1,287.00 up $8.00 and in the euro, at €1,131.926 down €1.035, while the euro was ¾ of a cent stronger at $1.1137. Ahead of New York’s opening gold was trading in London better, at $1,290.3 and in the euro at €1,135.43.
The silver price closed at $18.09, up 20 cents. Ahead of New York’s opening it was trading uncertainly at $18.00.
There were purchases of 9.259 tonnes into the SPDR gold ETF but a sale of 0.30 of a tonne from the Gold Trust on Tuesday. The holdings of the SPDR gold ETF are at 752.697 and at 167.54 tonnes in the Gold Trust. Again, a strong, seemingly institutional purchase, in the U.S. yesterday, appears to have been the cause of the gold price rise overnight.