Gold and Silver both showing ‘Desire to Rise’

The New York gold price closed Tuesday at $1,087.20 down $2. In Asia on Wednesday, it was lifted to over $1,094 before London opened and then was set by the LBMA at $1,093.20 up from $1,087.00 with the dollar index lower at 99.03 down from 99.21 on Tuesday. The euro was up at $1.0906 from $1.0867 against the dollar. The gold price in the euro was set at €1,002.38 up from €1,000.28. Ahead of New York’s opening, the gold price was trading at $1,095.15 and in the euro at €1,004.17 moving up nicely towards the $1100 level again.  

The silver price in New York closed at $14.03 up 3 cents at Tuesday’s close.  Ahead of New York’s opening on Monday, the silver price stood at $14.10.

Price Drivers

Yesterday, just ahead of the opening in New York there was an attempt to take gold’s delicate market balance and push gold prices down heavily through to $1,083, but over the day the gold price floated higher ending the day at $1,087.20, the same as it was when the day began. With Asia taking it over $1,090 this morning, the battle over the price in the last day was won by the bulls, perhaps indicating the way forward for the rest of the week. While we expected a strong move either way yesterday, the attempt to break the gold price down was foiled, but with an indication that the gold price would prefer to rise?

Tuesday saw no purchases or sales from either the SPDR gold ETF or the Gold Trust. The holdings of the SPDR gold ETF are now at 657.924 tonnes and at 161.46 tonnes in the Gold Trust.  This showed that the attempt to push gold down again had no physical substance so could not hold prices down.

With China now moving to play such an important role in the future of the gold market and its price, its moves to tighten ties with the Middle East and particularly Saudi Arabia [its largest oil supplier] and other Middle Eastern nations comes under the spotlight. Saudi Arabia has signed important developments contracts with China yesterday, leaving the U.S. out of these particular contracts. Is the hold over Saudi Arabia [and Iran] by the U.S. weakening? China may well do the same with Iran?

The advantage to them of China is that China stays away from politics, leaving them to do their own thing. At the heart of concern over such moves is the use of the dollar in oil transactions. China may be paying in dollars, now, but undoubtedly, will also offer Yuan, eventually. This will directly affect the dollar on foreign exchanges and by extension, the gold price. This could become China’s choice adding to China’s hold over the dollar on foreign exchanges?

The same desire to rise is found in the silver market, which ignored gold’s small fall yesterday before its recovery. Just as with gold, the same conditions apply to the silver price, which as always, will be sure to go. –

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

Gold could suffer ‘collateral damage’ as global equities fragile

The New York gold price closed Monday at $1,076.90 down from $1,094.60. In Asia it was moved up to $1,083.00 and London held it just below that with the LBMA price set at $1081.1 down from $1,090.75 with the dollar index almost the same at 98.97  from 98.94 on Thursday. The euro was at $1.0897 up from $1.0883 against the dollar. The gold price in the euro was set at €992.29 down from €1,002.25. Ahead of New York’s opening, the gold price was trading at $1,081.15 and in the euro at €992.29.  

The silver price in New York closed at $13.85 down 30 cents.  Ahead of New York’s opening the silver price stood at $13.77.

Price Drivers

Wednesday saw no purchases into the SPDR gold ETF but a purchase of 0.99 of a tonne into the Gold Trust. The holdings of the SPDR gold ETF are now at 654.057 tonnes and at 161.16 tonnes in the Gold Trust.  And yet the gold price tumbled. With COMEX futures and Options dominating prices despite no physical transactions, the fall in the gold price stretches credibility too far. We could well see some heavy volatility either way today.

With the dollar still restrained below 100 on the dollar index and the euro stronger against the dollar the gold price moves were against all currencies and the supposed link to the euro irrelevant at the moment.

The overriding mood in global financial markets remains pointing to the downside. Chinese equity markets ‘officially’ entered a bear market today [down over 20%]. Today’s additional 3.5% fall in Shanghai’s composite confirmed this today. Global equities are struggling to hold current levels as the long term fundamental market forces take their toll. We expect further falls in equity markets.

With Iranian sanctions being lifted possibly this weekend the oil price looks as though it is entering the $20s next week.

We are witnessing a tidal change from 2015 in global financial markets and one that will extend through the year. The foundation for this change was laid in the last three years with government and central banks actions delaying what now appears to have been an inevitable course. The failure of government and central bank actions to stimulate global growth tells us that future global financial woes will be too much for both governments and central banks to combat. The new ‘normality’ the Fed referred to last year may well be ‘renewed’ once more. As in 2008 gold is collateral damage in the markets, but as then, this defied reason and the gold price then moved to record highs in the next few years.-  

The silver price behaved better than the gold price yesterday and may well be less volatile than gold today.

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

Gold price pattern shows strong underlying strength

Julian Phillips sees strong underlying strength in the gold price as short positions are being unwound.

New York closed yesterday at $1,204.20 up $20.00 from the previous day’s NY close. Asia lifted it to $1,205.00, but London pulled it back to $1,202.60 ahead of the LBMA Gold price setting. The LBMA Gold price was set at $1,201.50 up $20.25. The euro equivalent stood at €1,097.92 up €12.99. Ahead of New York’s opening, gold was trading in London at $1,204.30 and in the euro at €1,112.21.

The silver price closed at $16.96 up 31 cents. Ahead of New York’s opening it was trading at $16.83.

There have been no sales or purchases gold from or to the SPDR gold ETF or the Gold Trust yesterday. The holdings of the SPDR gold ETF are at 737.237 tonnes and at 164.92 tonnes in the Gold Trust.

What we did see yesterday was strong short covering of gold positions. This is significant in that the consolidation pattern we are seeing in gold shows a very strong underlying strength. It does seem that despite developed world markets persistently trying to push gold prices down, the area around $1,200 is certainly one that gold demand feels is an acceptable entry point.  This is forcing speculators, despite their determination, to accept this level. Their marauding, shorting of the market is being defeated time and time again. When they decide that there are more profits to be made on the long side, like yesterday, they will change tack to long positions,

The dollar was weaker yesterday falling from $1.0745 to $1.0816 and the dollar index at 97.82 down from 98.34 yesterday.

It is almost certain now that an Iranian deal is about to be announced as the talks have been extended yet again. The points of difference are apparently not sufficient to abandon the talks. For gold investors, the impact on the oil price will be the focus. Yet it will take time before Iran can make a new heavy impact on the oil market. Currently, it is selling oil to China easily, but the global markets will see a discounting of the future by speculators. In further conversations with oil experts we are told that the impact on the oil price will not be so great. Consequently, we no longer see the oil price having a market downward or upward impact on the gold price.

It is a holiday in India today and tomorrow. Of more importance than this holiday for gold demand, is the coming Akshaya Tritiya holiday on the 21st April.  Indian demand overall remains very strong.

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