On Tuesday New York closed at $1,139.80 up $4.30. The dollar was stronger at $1.1335 at the close up from $1.1496, against the euro, with the dollar Index weaker at 95.39 down from 95.94 yesterday. The LBMA gold price was set at $1,140.00 down $1.90 today. The euro equivalent was €1,012.21. Ahead of New York’s opening, gold was trading at $1,136.85 and in the euro at €1,011.48.
The silver price closed at $14.60 down 4 cents over Tuesday’s close in New York. Ahead of New York’s opening today it was trading at $14.55.
China is closed as we write this and will be closed until Monday. Without the upward pressure of gold demand from there will we see an attempt to force the gold price down again? This may be a last chance to try that before the ‘gold season’ really starts. As it is the gold price is in the mid-range of its gold consolidation phase at the moment. Next week will see Asian demand rising steadily.
It is important for the gold price that we note that the Chinese middle classes is still experiencing strong growth despite the overall growth of the country slipping back [but still amongst the healthiest growth percentages seen around the world]. It is these classes that will contribute to growing demand for gold.
While equity markets around the world continue to fall heavily [we expect this to continue] gold is putting up a solid performance in dollar terms and an even better one in all other currencies. We are saying here that gold is acting very differently compared to other markets; a feature gold shows best when times are tough. Measuring this is not a day-to-day activity, it is one best seen when taken over time. Developed world markets are measured on short-term bases sad to say, because this focuses on individual’s performances not on the investments themselves. Such attitudes obscure real value.
It also ignores the underlying fundamentals that are pointing to tremendous turbulence throughout global financial markets, in the coming months, as interest rates are raised.
Governments do see gold as competing with currencies but once currencies lose user’s respect people and nations will turn to gold to support their currencies, but firmly behind their currencies, not as an alternative.
There were no purchases or sales from or to the SPDR gold ETF or the Gold Trust yesterday. This leaves the holdings of the SPDR gold ETF at 682.595 tonnes and 161.17 tonnes in the Gold Trust
Julian D.W. Phillips for the Gold & Silver Forecasters - www.goldforecaster.com and www.silverforecaster.com