Gold Today –New York closed at $1,383.30 down $5.40 on Thursday. London lifted the price by $3. It then fell before the Fix which was set at $1,379.75 down $6.50 and in the euro at €1,035.537 down €4.25 while the euro was slightly stronger against the dollar at €1: $1.3324. Ahead of New York’s opening gold stood at $1,380.00 and in the euro at €1,036.19.

Silver Today – Silver closed at $21.73, up 8 cents in New York yesterday. Ahead of New York’s opening silver stood higher at $21.72.

Gold _{(very short-term)}

We expect gold to consolidate around current levels again, in New York today.

Silver _{(very short-term)}

We expect silver to consolidate at current levels again, in New York today.

Price Drivers

Gold & Silver – We see the gold price continuing to consolidate at current levels. As we said yesterday, we may have to wait until Monday for the impact of Chinese demand on the gold & silver prices. Friday is usually the most active day in gold’s market in the U.S. and we expect rising volumes today in the gold market in the States.

The overall U.S. confidence levels, in the economy are higher than anywhere else in the developed world and U.S. investors read that as being contra the gold price. What investors need to do is to assess properly the ability of U.S. physical gold sales to push the gold price down and for how long. What is very clear is that when U.S. sales of gold stop, the Asian and central bank weight of demand will overwhelm gold supplies.

The U.S. based gold ETF SPDR was down by a much larger 6.314 tonnes of gold on Thursday to 1,534.263 tonnes. It was therefore no surprise that gold fell $5.40. It was a surprise that it did not fall further. So we cannot yet conclude that SPDR gold ETF sales have terminated. Until they do [and, as we said yesterday, we should allow a week before we can reach such a conclusion] we cannot expect the gold price to break upwards. It is already clear that the gold price is unwilling to fall back much further before rising support prevents further falls.

Official Indian gold imports have fallen heavily since the recent government measures against its imports. One would think that this would also crush the gold price, but at this time of the year, Indian gold investors are not in the market due to agricultural matters, so higher duties and restrictions on imports are less damaging to the gold price than they would be in the gold season in the third quarter onward. Reports are that smuggling of gold is rising quickly now and may well be sufficient to counter the restrictions. The premiums on the gold price in India will clarify this.  [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com] 

Silver – Silver’s is still waiting for a clear direction from the gold price.

Regards,

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