Gold and Silver consolidating as U.S. dollar bull market ending

Gold Today Gold closed in New York at $1,225.00 down from $1,241.30 on Wednesday. On Thursday morning in Asia, it rose to $1,235. London pulled it back to see the LBMA price setting at $1,233.60 down from $1,238.30 yesterday.

The dollar index fell to 94.51 down from 95.84 yesterday. The dollar is weaker against the euro at $1.1380 after yesterday’s $1.1330.

The gold price in the euro was set at €1,085.39 down from €1,092.94 on Wednesday.

Ahead of New York’s opening, the gold price was trading at $1,235.85 and in the euro at €1,085.98.  

Silver Today –The silver price closed in New York at $15.22 down 11 cents on Wednesday. Ahead of New York’s opening the silver price stood at $15.40.

Price Drivers

The Fed – End of the Dollar Bull Market With gold now consolidating at current levels, the comments by Janet Yellen continue to impact global markets with equity markets surging and dollar continuing to slip against all currencies.

Please note, we were the first to call an end to the dollar ‘bull’ market.

This view is now spreading with Janet Yellen’s comments of concern on the global economy and the strong dollar confirming the ‘official’ view. The U.S. Treasury is silent, even though it is in their department, because we believe, that with the audience the Fed has in the media, the message was given full force when she gave it. It’s the end of the dollar’s bull market, because the Fed and the Treasury want that to be so.

The Fed is telling us all that the U.S. and its dollar cannot walk its own road with the rest of the world following. It’s very much a part of the global economy and will not tolerate other nations devaluing against it. This underpins the gold price and neutralizes the so called reverse link between the dollar and gold.

This now allows investors to look at the future prospects of markets with a clear eye and look at gold. They will see peaks in equity markets soon, as these rise on factors other than prospective growth. We are in a world where growth is expected to plateau or fall as equity market rises are caused by monetary factors, not genuine growth prospects. This makes them susceptible to volatility and uncertainty.

We are hearing more and more institutions considering gold and silver as alternatives to equities and other investments.

Gold ETFs For the second time in a long time we saw sales of 1.189 tonnes of gold from the SPDR gold ETF but none from the Gold Trust, yesterday. This leaves their holdings at 819.282 and 185.88 tonnes in the SPDR & Gold Trust respectively. These sales did not move the gold price, but may have acted as a restraint on the rebound.

Silver – The silver price remains locked onto gold’s moves and rose slightly yesterday, but promises more rises shortly.

Julian D.W. Phillips | | StockBridge Management Alliance

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