Gold consolidating; equities in danger of moving into bear market

The New York gold price closed Monday at $1,094.60 up from $1,089.60. In Asia it was moved down to $1,090.45 and London held it there and the LBMA price was set at $1090.75 up from $1,081.80 down with the dollar index lower at 98.94 up from 99.25 on Wednesday. The euro was at $1.0883 up from $1.0817 against the dollar. The gold price in the euro was set at €1,002.25 up from €1,000.09. Ahead of New York’s opening, the gold price was trading at $1,085.75 and in the euro at €997.38.  

The silver price in New York closed at $14.15 up 34 cents.  Ahead of New York’s opening the silver price stood at $13.93.

Price Drivers

Wednesday saw purchases of 2.38 tonnes into the SPDR gold ETF but none into the Gold Trust. The holdings of the SPDR gold ETF are now at 654.057 tonnes and at 160.17 tonnes in the Gold Trust.  

These physical purchases were enough to push dealers to lift prices, but we see they are constantly inclined to lower prices when both physical sales and purchases are absent.

The gold price is now sitting on support that was previously resistance and, as we forecast yesterday the price bounced off support. It may continue the bounce, but remain in consolidation mode.

Equity markets are not just dipping in the short term, they are in danger of moving into a bear market, globally, as global growth slowing causes reactions. The overburdening debt and their ability to service such debt or repay it, is weighing heavily on governments and institutions and markets. Or have the days when debt should be repaid gone for good?

The generationally long shift in wealth and production to the east is now becoming visible in developed world financial markets. How can the developed world continue robust in the face of this wealth and power seepage? The state of the city of Detroit now in the days of its Motor Show, displaying American, foreign-made [China] cars is stark testimony to this.

As we enter the days of oil prices in the $20 range, which is failing to boost growth, ‘extreme’ times are arriving. But this time it is a global scene, with currencies at the heart of such times.

We have to wait for U.S. investors to see this global scene and buy gold, before its price runs higher, despite the fundamental reality that gold demand is running ahead of new supplies.

We do believe that the first half of 2016 will see gold’s pricing power move out from COMEX to Shanghai.

The silver price jumped on a relatively small move in gold, but will remain sensitive to the direction of gold prices.

Julian D.W. Phillips for the Gold & Silver Forecasters – and


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