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Gold seen as attacking overhead resistance.

Big Al
September 24, 2015

This missive is courtesy of Lawrie Williams (www.lawrieongold.com)

Gold seen as attacking overhead resistance

New York closed with the gold price at $1,130.10 up from $1,125.40 yesterday. Gold rose to $1,133 in Asia and London further to $1,135.50 ahead of the fix. The dollar strengthened to $1.1149 from $1.1171 and the dollar index held at 96.23 the same as yesterday. In London’s morning the LBMA gold price was set at $1,134.45 up from $1,124.600. In the euro this was €1,012.59 up from €1,010.06. Ahead of New York’s opening gold was trading at $1,136.50 and in the euro at €1,011.26.

The silver price closed at $14.79 down 2 cents on Wednesday in New York. Ahead of New York’s opening silver was trading at $14.80.

Price Drivers
While we expect gold and silver to consolidate in a tight range today it may well attack overhead resistance at $1,140. There was a purchase of 0.596 of a tonne of gold into the SPDR gold ETF but none into the Gold Trust on Wednesday. This leaves the holdings of the SPDR gold ETF at 676.395 tonnes and 159.30 tonnes in the Gold Trust. Gold continues to consolidate within the pennant formation.

We were intrigued by a statement President Xi of China made in the U.S. yesterday. He led us to believe that there was no intention to ‘devalue’ the Yuan. What does this mean? A devaluation is where a nation’s central bank informs all that it will intervene in its foreign exchange market to lower the exchange rate of its currencies to a specific level. Recently we saw the first step by China to ‘float’ its exchange rate and allow the market to establish an exchange rate for a currency. They did not ‘devalue’ the Yuan, the market took it lower. It is clear now that China was as surprised as anyone by the fall and has stepped in to support the exchange rate of the Yuan against the dollar. Could this be called a revaluation? Has the ‘peg’ to the dollar been re-established?

China is clearly determined to get the Yuan accepted as one of the currencies that makes up the SDR of the IMF as a major step to becoming a world reserve currency. It is doing whatever it takes to make this happen, even holding up the exchange rate of the Yuan when it should fall. We may hear in November that it has succeeded in doing that, even though this may not be implemented until Sept 2016 or later. Thereafter it won’t devalue but may well allow the market to ‘float’ it lower.

President Xi also made another step on this road to please the IMF by confirming that Capital Controls are on the way to being removed. This implies full convertibility of the Yuan. The reporting of gold additions to reserves is also being done to please the IMF. All of this is gold positive!

Julian D.W. Phillips for the Gold & Silver Forecasters – www.goldforecaster.com andwww.silverforecaster.com

Discussion
21 Comments
    Sep 24, 2015 24:43 PM

    The inevitable rise of GOLD and SILVER has ALWAYS been in the “cards”. NOT a matter of IF but WHEN….FWIW…the closest thinking that I have to my line of thinking and his very sage advice is Richard Russell…why on earth I didnt subscribe to him years ago when the BULL market in stocks was raging and decades long…oh well…moving on!

      Sep 25, 2015 25:02 AM

      fwiw……..I think you are correct on Russell……….. enjoy the weekend. J.

    Sep 24, 2015 24:09 PM

    S&P gonna retest the 2009 lows. Gold gonna take off.

      Sep 25, 2015 25:53 AM

      If S&P takes out 2009 lows then Dow would complete its giant megaphone pattern of the last 16 years at under 6,000. The measured move out of that on a log chart would be to under 2,000 finally, around 1,800. That would be the deflation scenario for Dow:gold ratio to go to 1:1 at 1800, without gold’s going to a new high!

        Sep 25, 2015 25:53 AM

        That would be a better outcome for gold investors than having a huge nominal gain since it would be much more difficult to tax as heavily.
        The higher the dollar price, the more bullion the investor loses to taxes (if applicable).

      Sep 25, 2015 25:51 AM

      Interesting chart Gary, that clearly and really neatly shows that the HUI miners’ index still look in a bearish trend while gold chat looks relatively perky. I just took a look and the XAU, GDX and GDXJ are all underperfoming gold here. Strangely though perhaps, the GDXJ looks the best of the indices with a sort of a series of higher lows.

      Some of the miners have almost identical charts: Agnico-Eagle, Franco-Nevada and Randgold not quite as good as the first two – and all slightly worse than gold.

    Sep 25, 2015 25:16 AM

    is this Williams too old to post…irrelevant..?

    Sep 25, 2015 25:27 AM

    Gold is already at $1146, posting is a little out of date.

    Sep 25, 2015 25:11 AM

    DAVID STOCKMAN out with a great report on CARLY F. , says she is not qualified to be President, since she ran HP in the ground and her mentality is the same as the MILITARY INDUSTRAL COMPLEX same ole same ole. He said she has a great memory and can read “Q” cards well, …. and does not have a clue , when it comes to history , war or foreign affairs.

      Sep 25, 2015 25:12 AM

      SMOOTH TALKER………….jmho

      Sep 25, 2015 25:15 AM

      I agree with Stockman but since when is “qualified” a consideration? Funny stuff.

    Sep 25, 2015 25:26 AM

    JOHN BOEHNER………..house speaker calling it quits………at end of OCT.,..the POPE PUT THE POOPS ON THE BOEHNER