New York closed Tuesday with the gold price at $1,105.50 down $3.20. Gold then rose in Asia to $1,107.7. In the euro this was €980.05 up €0.39. This morning the dollar index started the day at 95.59 slightly higher than the 95.22 of yesterday. The LBMA gold price was set at $1,109.75 up $4.25 from yesterday. The euro equivalent was €988.60 up by €11.60. Ahead of New York’s opening gold was trading at $1,108.90 and in the euro at €988.10.
The silver price closed at $14.43 down 1 cent on yesterday in New York. Ahead of New York’s opening silver was trading at $14.56.
Price Drivers
The entire financial world remains on hold for the Fed’s statement on Thursday with speculation ramping up in the media. Why the hype? It is not just a rate hike in itself. The levels of debt throughout the world have never been this high, they dwarf anything we have seen in history. For instance some believe that the U.S. car market loans are in a bubble, with loans being dished out to even those that cannot afford them. Individual and corporate debt, let alone central bank debt will be immediately impacted even with a small rate hike. Even a small rate hike will change the world’s attitude to debt and cause a detrimental impact on all financial markets.
Gold and silver prices remain barely moving, waiting for the starter’s gun. The question is, “Which way will they run?” Likewise, there were no dealings in the SPDR gold ETF or the Gold Trust. This again leaves the holdings of the SPDR gold ETF at 678.183 tonnes and 159.90 tonnes in the Gold Trust.
The media remains riveted to slowing growth in China. We are prompted to point out that the government there has informed all that growth will slow as attention turns from building infrastructure to building up the consuming middle classes. With retail sales figures in July growing over 11% [Is there any other nation reaching such levels?] the middle classes are growing, confirming success in this change of direction. For gold and silver investors these are the important numbers as these are the people fuelling the enormous gold demand we are seeing in the numbers coming out of the Shanghai Gold Exchange.
Julian D.W. Phillips for the Gold & Silver Forecasters – www.goldforecaster.com and www.silverforecaster.com