New York closed at $1,084.70 down $3.70 yesterday. In Asia it rose to $1,088.05 before London opened. The LBMA price setting fixed it at $1,087.60 down from $1,088.60 over yesterday. The dollar Index is at 99.14 up from 98.95 at today. The dollar is at $1.0715 up from $1.0740 against the euro. In the euro the fixing was €1,014.795.63 down from €1,015.63. Ahead of New York’s opening gold was trading in the dollar at $1,086.85 and in the euro at €1,014.14.
The silver price closed at $14.30 down 12 cents from yesterday’s close. At New York’s opening, silver was trading at $14.42.
The currency markets, the dollar and the gold price stabilized with a weaker bias, again today. Again, the dollar has not broken through the 100 level on the dollar Index. With the Eurozone contemplating negative interests rates down as far as 0.75% [like Denmark and Sweden] we believe that the Treasury and the E.C.B. have or will agree that such stimuli not be permitted to weaken the euro. That is, if the dollar Index rises above 100, convincingly. Technically the euro should be moving to par with the dollar. We continue to watch to see if this is the new way forward. If so it will have a positive impact on the gold price.
There were no sales from the SPDR gold ETF but sales of 0.45 of a tonne from the Gold Trust. The holdings of the SPDR gold ETF stands at 663.432 tonnes in the SPDR gold ETF and at 159.85 in the Gold Trust. These sales had no impact on the gold price
Single’s Day on Alibaba was around 50% higher than last year, confirming what we said about the burgeoning growth of the middle classes in China. It is from this quarter that the future gold demand will come. The day was certain evidence of the rising disposable income among those classes. If we are to believe the Indian GDP growth figures of 7.3% we will see the urban Indian middle classes change the shape of Indian gold demand too. Currently the demand from the agricultural community is poor this year as a low quality monsoon led to lower disposable income for gold. However, the available figures on Indian demand completely ignores smuggled gold, which has to be 25% plus, of supply to the nation.
Julian D.W. Phillips for the Gold & Silver Forecasters - www.goldforecaster.com and www.silverforecaster.com