Gold & Silver Market Morning: Oct-28-2014

Gold Today – The gold price closed at $1,229 down $2.00 on Monday. Asia and London held it there until the Fix which was set at.The euro is slightly stronger this morning at $1.2699. The Fix was set $1,228.75 down $1.75 and in the euro at €966.835 down €3.744, while the euro stood stronger at $1.2709. The volumes of gold traded were one seller selling 36,000 ounces and one buyer buying24,000 ounces before the pro-rata process kicked in.Ahead of New York’s opening, gold was trading at $1,228.40 and in the euro at €967.66.

Silver Today – The silver price closed in New York at $17.20 up 1 cent, holding as gold slipped. Ahead of New York’s opening it was trading at $17.25.

Gold _{(very short-term)} Gold is likely to consolidate, in New York, today.

Silver _{(very short-term)} Silver is likely to consolidate, in New York, today.

Price Drivers

In New York there were no sellers or buyers of gold from or to the SPDR gold ETF but there was a sale of 0.33 of a tonne from the Gold Trust on Monday. The gold price remains in consolidation mode today. The holdings of the gold ETFs stand at 745.387 tonnes in the SPDR gold ETF and at 161.69 tonnes in the Gold Trust.

We remind readers that gold demand from both India and China remains strong. Many would have expected the gold price to have risen further of late, but it hasn’t. Why? We point to earlier reports from us and remind you all that Asian demand does not chase prices, simply buys at bargain levels. Support is very strong below these levels and particularly below $1,200 or close to it. We are now suiting on that support at the moment.

The Eurozone stress test on banks, while comforting will do little to nothing to promote growth there. Lending remains restrained and is likely to continue to do so. Growth is barely there and in many member states economies are in recession. The euro should be weaker were it not for the desire of the U.S. to keep exchange rates at current levels. Unless there is substantial bad news we do not expect to see the euro fall much further now, despite good reasons for it to fall to $1.10. In the last six months the outflows from fixed-income securities and the euro were €187.7 billion ($239 billion) up to August, the most in ECB data going back to the currency’s debut in 1999. There is no reason why this should not continue as the E.C.B. has already started a muted form of quantitative easing.

It seems that the next year promises more of the same of what we have seen in 2014 on both sides of the Atlantic. On the positive side, the shift of wealth and power to the east has been enormous, so the fact that the developed world has managed to hold up is remarkable! Having said that, the future for gold is brightening as the structural global problems promise some disruptions next year.

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Silver– Silver prices continue to hold up while gold slips. We expect this to continue unless gold has a heavy fall. www.SilverForecaster.com

Kind Regards,