Recession is now the story
Equity markets recovered some poise this week, allowing gold to stabilise. But how will they behave next week, and how will gold and silver be affected?
This week, gold consolidated, showing remarkable price resilience, while silver less so. In early European trading this morning, spot gold was $2425, down $17 from last Friday’s close, while silver was $27.52, down a dollar on the same time scale. Aside from Thursday morning, there was little evidence of overnight gold demand from Asia ahead of London’s morning fix, suggesting that market turmoil in equities is having a deterrent effect on Chinese speculators.
That gold is more resilient than silver in these conditions confirms that solid eastern demand for bullion continues, with Chinese banks quietly taking any that’s offered. This is limiting attempts by bullion bank traders on Comex and in London to reduce their positions. Instead, they have been focusing on silver, undoubtedly trading silver’s wild swings very profitably.
The next two charts show how different the technical position in silver is compared with that of gold on Comex.
