New York closed with the gold price at $1,152.90 up from $1,130.10 yesterday. Gold fell back to $1,147 in Asia and in London further to $1,142 ahead of this morning’s fix. The dollar was stable at $1.1150 and the dollar index a little higher at 96.50 from yesterday. In London’s morning the LBMA gold price was set at $1,145.50 up from $1,134.45 and $20 in the last two days. In the euro this was €1,025.51 up from €1,012.59. Ahead of New York’s opening gold was trading at $1,143.90 and in the euro at €1,024.27.
The silver price closed at $15.13 up 34 cents over Thursday in New York. Ahead of New York’s opening silver was trading at $15.06.
Gold, as we thought it would, attacked resistance at $1,140, jumped through it, as short covering on COMEX came in strongly to take gold to $1,154 before is pulled back to $1,140, which is now support. We do expect to see more short covering as it is clear that a further strong rise is possible today. The short positions on COMEX were at record highs and long positions at very low levels.
There was a purchase of 3.873 tonnes of gold into the SPDR gold ETF and one of 0.51 of a tonne into the Gold Trust on Thursday. This leaves the holdings of the SPDR gold ETF at 680.268 tonnes and 159.81 tonnes in the Gold Trust.
After a relatively massive quantitative easing program in Japan, it was announced today that the country has gone back into deflation. We are of the opinion that quantitative easing in the U.S. did prevent a banking collapse but was not the panacea for the U.S. economy it was made out to be. Japan’s current performance bears that out. Just as reassurances that all will be well in the global economy are being postured by the authorities and media, the realities are pointing to a global economic downturn. As for the U.S. being able to have a strong recovery in isolation from the rest of the world, Janet Yellen has already scotched that concept. “No man [nation] is an island…” Reality points to the way of global slowing and financial turmoil of which we have already had a taste.
Gold is doing well in all currencies except the dollar and that’s the point. Gold is doing very well apart from the dollar, but more importantly, demand has never been higher. U.S. investors will return to gold once it gets close to $1,200 as U.S. investors buy on the rise for a profit, short term. Once the U.S. restrains the dollar from rising further gold will rise in all currencies.