New York closed on Thursday with the gold price at $1,114.30 down from $1,116.00. With China closed and the pre London opening seeing the gold price fall to $1,110 we find it difficult to accept such a fall when no market is open. When London opened the gold price slipped again to be set at $1,106.30 at the LBMA gold setting. The dollar Index was at 96.30 at the time and the dollar trading against the euro at $1.1165. In the euro the fixing was €990.86 down from €998.48. Ahead of New York’s opening gold was trading at $1,107.3 and in the euro at €992.12. The silver price closed at $14.56 up 2 cents over Thursday in New York. Ahead of New York’s opening, silver was trading at $14.43.
Today sees the announcement on the jobs report with 200,000 jobs expected. The caveat is that both in August and September these figures are subject to revision, subsequently. More importantly, the make-up of the jobs report is a clearer guidance to what lies ahead. We know that Manufacturing jobs [permanent] continue to fall as manufacturing continues to be drained to Asia. The big jump is expected in the services industry [temporary] with a smaller amount in the construction industry set to grow. Wage increases are at 0.1% higher a sign that there is no pressure on employers to raise wages, which confirms that job security is not that solid. The Fed is looking for a consumer who sees his job being secure, wages rising and disposable income rising too. This has not happened yet. It may not happen for a long time to come still. The U.S. looks at these numbers to see if they point to a stronger dollar via an interest rate hike and then push the gold price down thereafter. With Janet Yellen confirming a rate rise before year’s end just how important is that proposed rise if the data does not support it?
The gold ETF SPDR in the U.S. saw a purchase of 1.787 tonnes but nothing into or out of the Gold Trust yesterday, but this was insufficient to halt its fall. This leaves the holdings of the SPDR gold ETF at 689.204 tonnes and 160.65 tonnes in the Gold Trust. The trading range of the gold price has fallen below the bottom end of support which was on $1,100. We may see a strong move shortly, either way.
We are particularly waiting to see if the London and U.S. market reflects the closure of China until the 7th October. So far it has, as the gold price has dropped in the last two days. With U.S. investors being buyers of gold into the U.S. based ETFs this week, it is clear that the speculators and traders hold sway over prices.
Silver is back is sagging as gold slips and faster than gold falls. Expect more of the same today. Julian D.W. Phillips for the Gold & Silver Forecasters – www.goldforecaster.com and www.silverforecaster.com