Silver Market Morning

Gold Today – Since Wednesday gold has moved steadily upward to trade in Asia at $1,693 before London opened. The euro also rose on Thursday to touch €1: $1.3393 at the start of business in London. Gold then Fixed at $1,690.00 and in the euro at €1,265.82 up over €3 again despite a stronger euro at .The euro was slightly stronger at €1: $1.3351. Ahead of New York’s opening, gold was $1,690.70 and in the euro at €1,266.11.

Silver Today – Silver rose with gold overnight to $31.90 up 2% on Wednesday’s price. Ahead of New York’s opening silver stood at $31.80.

Gold _{(very short-term)}

The strong move to $1,693 is underway but we may see the rise turn to a consolidation pattern in New York today.

Silver _{(very short-term)}

Silver is moving strongly upwards, vigorously but it may pause today to consolidate in New York today.

Price Drivers

Gold & Silver – The report that Germany is moving half its gold holdings back to Frankfurt has the market in a buzz. It may be that there is far more than meets the eye behind this. Venezuela repatriated its gold in the last years motivated by the vulnerability it faced from its previous allies in the developed world. But Germany still keeps its allies in the developed world. While popular and parliamentary pressures initiated the move perhaps prudence underlay the move too. With France using the same currency as Germany the move from France back home is understandable. With precautions to ensure the its gold is available as collateral outside the euro area, continuing to hold gold in London is understandable too, likewise the U.S. But the questions that remain unanswered are:

1) Because the movement of gold from Europe to the U.S. between 1935 and the war were engineered in financial markets, as was the repatriation of the gold to Europe through to 1971 when the gold window was closed so seen as precautionary moves to protect that gold in wartime, is Germany foreseeing times ahead when it needs to protect its gold at home. If so what is that scene?

2) Whatever the reason is the prudent reasoning requires the developed nations to hold their own gold primarily at home. So will other developed world nations follow suit?

3) With the transport of that gold taking seven years, many will be asking, “Is that to give the central banks, where it is held, to re-acquire the gold from lessees? If so will that lead to developed world central banks buying gold in the open market?

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Silver – Silver’s robust price performance continues and favors the upside.

Regards,

Julian D.W. Phillips for the Gold & Silver Forecasters