Price of Gold is Under Pressure

Feb 11, 2015
The price of gold on the spot market hit $1,222.20 per ounce, down $11 USD from Monday’s price. This is the weakest gold has been since January. Technical traders moved to aggressive short selling positions as gold broke through its 50-day moving average. There is a tale of 2 gold markets. One Market is trying to drive prices higher. This is lead buy counties such as China who are well into a massive buying program of physical gold. The other market is the paper market where the technical traders have driven the market to over shooting the real supply and demand and driving prices move volatile both on the highs and the lows.
Gold Price Feb 11, 2015

The demand for accumulation of physical gold is so strong that the buyers are continuing to buy on the way down. In the past they would sit out and wait for a bottom, but they so strongly believe that the market will head higher that they continue to buy. This sediment is echoed by Andrew Maguire of Andrew Maguire’s trading service.
At the same time the Perth Mint in Australia announced that the sale of minted gold bars and coins, in January had declined to the lowest level since April 2012, according to official data on Mint’s website.
While gold in under pressure, silver is on the uptick with an appreciation of 10% in January according to the Pert Mint. This is in sharp contrast to the 12% decline in silver coin sales in 2014 at the Pert Mint. The spot market for silver on Monday closed at $16.78/16.83 per ounce down 10 cents.
Silver Price Feb 11 2015

This market dynamic has the physical silver market trading on margin. Knowing that a real shortage of physical silver could cripple industrial users such as cell phone manufactures, institutions such as the London bullion market (LBMA) want to ensure that the industrials users will get their silver before investors. Any delay in the delivery of silver to the industrial users would force them into an attempt to stock pile silver and that could cause a run on the silver market.