Lawrence Williams

About the Author Lawrence Williams

Former CEO of Mining Journal Ltd. and subsequently General Manager of Mineweb.com - a position relinquished in October 2012 to continue as a freelance writer. Graduate mining engineer from London's Royal School of Mines (part of London University) - has worked on gold, platinum and uranium mines in South Africa, copper in Zambia, uranium in Canada and holds a South African Mine Manager's Certificate. Joined Mining Journal originally as Financial Editor and worked for the company for over 30 years spending 13 years as CEO. Particular follower of the gold and platinum market and has written numerous articles on precious metals for Mining Journal and Mineweb and has also written for London's Financial Times as well as for other media and publications including SeekingAlpha. Has been regular writer for mineweb.com - and now has own blog - www.lawrieongold.com as well.

Gold and Silver Prices Still Being Pushed Down by Stronger Dollar Expectations

New York closed at $1,103.50 down from $1,107.50 on Thursday. In Asia it rose to $1,110.00 again, before London opened. The LBMA price setting fixed it at $1,107.70 up 30 cents over yesterday’s LBMA price setting. The dollar Index was stronger yesterday and rose to 98.01 up from 97.94 at the close of New York. The dollar was slightly weaker at $1.0879 down from $1.0861 against the euro.  In the euro the fixing was €1,018.29 down from €1,019.71.  At New York’s opening gold was trading in the euro at €1,018.85 and at $1,108.25.

The silver price closed at $15.00 down 9 cents over Thursday’s close. At New York’s opening, silver was trading at $15.05.

Price Drivers

Technically, we repeat what we said yesterday that the gold price is still pointing lower. However, for the first time in several days the gold price has stopped falling and Asia, for the second day running, is pushing back against the New York market. But still we remain in a high risk area with the possibility of a hefty bounce or continued fall.

Thursday saw sales from the SPDR gold ETF of another 8.337 tonnes making over 24 tonnes sold this week but nothing was sold from the Gold Trust leaving their holdings at 671.768 tonnes and at 160.30 in the Gold Trust. This was a heavy selling day and the cause of the fall in the gold price. Friday is the busiest day in the gold week, so we may well see heavy physical sales again in New York.

Yesterday’s postponement of the rate hike in the U.K. is a caution to those who expect a December rate hike in the U.S. The U.S. and U.K. central banks want markets to expect rate hikes as this tempers speculation and asset bubbles, but the global situation remains dubious. Rate hikes strengthen currencies and neither the U.K. nor the U.S. wants to see their currencies strengthen to the point they lose international trade competitiveness. Hence we do not expect a rate hike until 2016. A dollar index of over 100 is just not in the interests of the U.S. This impacts the U.S. & U.K. gold markets heavily as the gold price is being pushed down by those markets in expectations of a stronger dollar.

Silver prices may stabilize today. We emphasize may!

  • Todd

    “Thursday saw sales from the SPDR gold ETF of another 8.337 tonnes making over 24 tonnes sold this week but nothing was sold from the Gold Trust leaving their holdings at 671.768 tonnes and at 160.30 in the Gold Trust. This was a heavy selling day and the cause of the fall in the gold price.”

    How reliable are GLD’s holding reports? GLD does not give retail investors the right to redeem for any of its mystery physical gold holdings. This fact alone ensures the GLD shares to be nothing more than paper at the end of the day. GLD also has a glaring audit loophole in their prospectus that states they have no right to audit subcustodial gold holdings. To this day, I have not heard of a single good reason for the existence of this backdoor to the fund. Some other red flags I’ve verified and welcome everyone else to do the same:

    “Did anyone try calling the GLD hotline at (866) 320 4053 in search of numerical details on GLD’s insurance? The prospectus vaguely states “The Custodian maintains insurance with regard to its business on such terms and conditions as it considers appropriate which does not cover the full amount of gold held in custody.” When I asked about how much of the gold was insured, the representative proceeded act as if he didn’t know and said they were just the “marketing agent” for GLD. What kind of marketing agent would not know such basic information about a product they are marketing? It seems like they are deliberately hiding information from investors.

    I remember there was a well documented visit by CNBC’s Bob Pisani to GLD’s gold vault. This visit was organized by GLD’s management to prove the existence of GLD’s gold but the gold bar held up by Mr. Pisani had the serial number ZJ6752 which did not appear on the most recent bar list at that time. It was later discovered that this “GLD” bar was actually owned by ETF Securities.”