Gold Today –On Wednesday the gold price in New York fell to close at $1,240.6 down$2.80 with Asia lifting it $1 higher. The dollar barely changed at $1.3624: €1 ahead of London’s opening. Today, gold’s movements are a reflection of currency moves only. In London the gold price was Fixed at $1,237,25 down $0.75 on yesterday. In the euro it, Fixed at €908.607 up €0.50. Ahead of the opening in New York gold stood at $1,238.15 and in the euro at €909.33. The dollar stood at $1.3615:  €1

Silver Today –The silver price edged down to $20.15 down 4 cents in New York yesterday with Asia holding it there before London’s opening. Ahead of New York’s opening, it was trading at $20.00.

Gold _{(very short-term)}

The gold price will have a narrow trading range ahead of a strong move, in New York today.

Silver _{(very short-term)}

The silver price will have a narrow trading range ahead of a strong move, in New York today.

Price Drivers

Yesterday saw no sales from the SPDR gold ETF but the Gold Trust gold ETF saw sales of 0.46 of a tonne, leaving their respective holdings at 789.556 and 161.37 tonnes respectively.

The gold price is now in a very tight trading range ahead of a strong move either way. The question to ask is, “Has enough work been done to break overhead resistance down?”

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We have pointed to global economic situations becoming “mercurial” in time. We caught a glimpse of why, yesterday. The I.M.F. has warned of deflation coming this year. This is a nightmare for governments because it is far more difficult to control than inflation. Deflation, however, has been a constant threat since the credit crunch and insufficient growth and recovery has been seen to dismiss such fears. On the other hand should solid growth be tempered by rising interest rates, so many markets [housing, fixed interest rate markets, etc] will be badly damaged! Huge tsunamis of capital will flow back to the developed world driving down exchange rates in countries that love gold. China’s now $1.3 trillion of Treasuries will lose value. The potential damage is now far bigger than ever contemplated before.

In either growth or deflation huge dangers lie. The ability to control which way it goes has diminished rather like trying to hold mercury down and still. That’s why governments want inflation to rise, but once that starts up again it too will be very difficult to control, without bringing on the other dangers.

It is in such an environment going forward that we look at the gold price and find it increasingly difficult to make a case for much lower prices.

Silver – The silver price is waiting for gold to give it direction.

Regards,

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

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 -- Published: Thursday, 16 January 2014 | E-Mail  | Print  | Source: GoldSeek.com

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