Julian Phillips update on what’s been happening in the gold and silver markets and the global price drivers affecting them
New York closed at $1,221.80 up $7.00 over Thursday’s close. Asia took it down to $1,220.10. The LBMA Gold price was set at $1,216.30 up $15.75 over Thursday’s level. The euro equivalent stood at €1,070.78 up €7.36 while the dollar was stronger and the euro weaker at $1.1359 from $1.1423 against the euro. Ahead of New York’s opening, gold was trading lower in London at $1,214.00 and in the euro at €1,068.94.
The silver price closed at $17.43 up 32 cents on Thursday’s level. Ahead of New York’s opening it was trading at $17.30.
On the ides of May gold broke through the 200 day moving average of $1,220 but has fallen back to $1,214, although is back on the up again. We wait to see if today, Friday, will see it firmly staying above that level. This will be a game changer!
The dollar was slightly stronger at $1.1358 from $1.1428 against the euro with the dollar index back at the day level of Wednesday at 93.80.
Most importantly there has been a change of mood in global financial markets. The poor U.S. retail data caused not only a weaker dollar but equity markets to jump as investors saw no change in interest rates until next year, allowing equity markets to run ahead to new highs. But the basis for this is not healthy, as a weakening U.S. economy has ramifications for the entire developed world.
With changes coming in the monetary system, 2015 is going to be not only a year of consequences, but of fundamental changes, which will benefit gold and silver! Can it be that the long winter of discontent for gold and silver is becoming glorious summer once more or is more work still needed?
There were sales of 4.414 tonnes of gold from the SPDR gold ETF on Thursday and no movement in the Gold Trust. The holdings of the SPDR gold ETF are at 723.911 tonnes and at 166.14 tonnes in the Gold Trust. These sales occurred while the gold price was breaking out. We watch with keen interest to see if further sales come from the SPDR gold ETF today.
The silver price has moved with gold for several years now and we believe it will continue to do so. But silver has led the way on this breakout, so we ask again is this because of the excellent fundamentals? We think not, as it has and will be, moving as a monetary metal, despite it having no monetary role. With the health of the monetary system slowly decaying over the years savvy investors are protecting themselves. Many will question this conclusion because it is so long since silver was recognized as money. We would answer by saying that it is more a turning away from fiat currencies to items that have always been recognized as measures of value over man’s existence. It is only since 1971 that the world decided to reject precious metals as money. But what has proved more acceptable when push came to shove? We are moving into shoving times very soon.