Julian Phillips reckons the underlying currents for gold and silver will lead to a major price move – but timing remains uncertain.
New York closed at $1,188.50 up $1 on yesterday as the trading range tightens again. Today sees the dollar almost the same as yesterday at $1.0949 against the euro with the dollar index at 97.06. The LBMA Gold Price was set at $1,190.40 up $0.95 and the equivalent euro price was €1,087.75. Ahead of New York’s opening, gold was trading in London at $1,189.00 and in the euro at €1,082.43.The silver price fell back to $16.70 up 1 cents in New York. Ahead of New York’s opening it was trading at $16.72.
Wednesday and Thursday saw no purchases or sales into or from the SPDR Gold ETF and Gold Trust. The holdings of the SPDR gold ETF are at 715.857 tonnes and at 166.60 tonnes in the Gold Trust.
Today, being Friday, is the busiest day of the week for gold and silver in New York as traders and speculators don’t look at one day’s risk but three days. The week has been relatively quiet but the trading range of gold and silver has tightened as they both sit on support.
The saying for traders is that if it won’t go up it must go down. The long sideways move of both over the last 18 months disproves that. So which way is it likely to go?
To be able to see which way, one has to go deep into the fundamentals beyond statistics and look at the underlying currents that will shape the future of the gold market. Doing so makes it clear that 2015 & 2016 will be remarkable years for these two precious metals. Like tectonic plates pushing against each other making pressures build up we must wait for that point when we have an earthquake. What history shows is that it may take just a tiny event to trigger major moves after the foundation of such a move has been laid over such a long time. When will it happen? It’s impossible to say, but we are certain it will happen! Everything changes after that.
While Austria’s intention to repatriate 110 of its 280 tonnes of gold is being treated as only another case of repatriation, a comment made by Russia’s central bank official brings more weight to the issue. Dimitry Tulin told lawmakers in the lower house of the Russian parliament, “The price of it (gold) swings, but on the other hand it is a 100% guarantee from legal and political risks.” In Russia’s case this is clear, but why are leading E.U. member states repatriating gold from the U.S. and U.K.? It must be for similar reasons.
Gold held in foreign banks may be easier to use as collateral already out of the control of owning central banks, but such actions imply considerable trust in these banks and their officials and their masters. It appears that this trust is now being questioned as global political tensions and changes in the balance of economic and political power are weakening traditional alliances and power bases. As such gold policy changes have been made. This is one of the foundation stones of what will happen in the future.