Gold Today – The New York gold price closed at $1,371.60 up $4.60 on Thursday in New York. Asia took it up again to $1,375 ahead of London’s opening. The gold price was Fixed in London at $1,370.00 down $1.00. In the euro, it Fixed at €986.463 up €4.16 as the dollar continued to strengthened to $1.3888 up 0.69 of a cent against the euro. Ahead of the opening in New York gold stood at $1,371.70 and in the euro at €987.37.

Silver Today – Again, the silver price closed at $21.17 down 11 cents in New York. Ahead of New York’s opening, it was trading at $21.33.

Price Drivers

Gold held its gains yesterday and is doing so at the moment.  While there is little, if any, overhead resistance until over $1,400, it would reinforce the breakout if the gold price consolidated at these or slightly lower levels. But this may not happen as this is a Friday and activity in the gold markets is at its weekly highs today. There are many short positions out there that are becoming very nervous. Nevertheless, we would expect a day of consolidation, with a positive bias, to be most likely. 

The dollar is trying hard not to fall further today as it recovered 0.69 of a cent against the euro on Asian markets. The swap arrangements between the E.U. and the U.S. are more than sufficient to hold this exchange rate at a level the authorities wish it to trade at, despite the downward trend for the dollar against the euro. In the past, we have seen it over $1.40: €1, but have noted that it was pulled back to between $1.20 and $1.40. It is in the interests of both the U.S. and E.U. to keep it there. Therefore gold, if it moves higher, will do so against all currencies.

There were small purchases into of the SPDR gold ETF [GLD] of 2.098 tonnes but none into or from the Gold Trust, on Thursday, which left their respective holdings at 813.296 tonnes and 165.14 tonnes. The purchase was too small to impact the gold price, but it confirms that the fund reflects two way traffic and a changed attitude to gold in the U.S. We are constantly watching to see if our conclusion that broad based U.S. sales of gold have stopped. If so, then last year’s supply of 1,300 tonnes has stopped. This is and will affect the structure of the supply/demand picture significantly.

Silver – The silver price is holding back today waiting for gold to lead the way but prepared for a pullback in the price of gold. In the past, when this has happened silver holds back for some time then suffers the ‘shunt’ effect, when gold moves forward firmly. We need to point out that the silver price is made in the U.S. not in London.

Julian Phillips is the founder of www.GoldForecaster.com and www.SilverForecaster.com