Gold seen to consolidate with positive bias Monday

Gold Today – The gold price closed at $1,316.10, down $0.10 on Friday in New York. In Asia prices fell to $1,313.40. In London, the Fix was set at $1,313.00 down $2.25 and in the euro at €961.623 down €4,691, while the euro stood slightly stronger at $1.3654. Ahead of the opening in New York the gold price was trading at $1,313.00 and in the euro at €961.76.

Silver Today – The silver price closed at $20.99 down 9 cents, in New York. Ahead of New York’s opening, silver was trading at $20.83.

Gold (very short-term)

Gold should consolidate with a positive bias in New York today.

Silver (very short-term)

We expect silver to consolidate with a positive bias in New York today.

Price drivers

There were no purchases of gold into the SPDR gold ETF or into the Gold Trust in the U.S. on Friday. The holdings of the gold ETFs stand at 785.016 tonnes in the SPDR gold ETF and at 163.62 tonnes, in the Gold Trust.

The Iraq nation is disintegrating into three different nations and the first was announced over the weekend, the ISIS Caliphate. The border of Iraq and Syria on the Western side, have been erased. This set the stage for a polarization of the Islamic war that has seen a gear shift in intensity, with oil to become a weapon of war soon.

As part of the punishment of BNP Parisbas, the bank will be prevented from clearing U.S. dollars in its transactions, which will particularly affect oil transactions, normally around a quarter of most non-oil-producing nations imports. We see this as a huge incentive for nations to remove this vulnerability to U.S. authorities. If we are right and Yuan convertibility likely within a year or so, we have no doubt that banks and central banks will be keen to lessen dollar reserves in favor of Yuan reserves and find a way to pay for oil by-passing the dollar where possible. Little could be more gold positive!

We mentioned the increased vulnerability of economies as a result of lackluster economic performance. The central bank of central banks, The Bank for International Settlements, has now warned of the “false sense of security record low interest rates are causing”. Tie these two factors together and you find, the developed world in particular, that if we extrapolate the global economic threats and set them against this backdrop, we see a backdrop where monetary crises find an easy breeding ground. We explain more on the above events in our next issue of the newsletters [see below]. [Subscribe – see to protect yourself from penalties from holding your gold overseas when it is to be confiscated].

Silver– Silver is slightly weaker than gold but should change for the better later in the week. []

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