Silver Market Morning

Gold Today – In New York the gold price rose $5.50 to $1,673.00down only 50 cents, yesterday. In Asia on Monday it traded around the same level and then Fixed at $1,670.75 and in the euro at €1,234.93, while the euro was $1.3529. Ahead of New York’s opening, gold was $1,671.00 and in the euro at €1,235.22.

Silver Today – Silver closed at $31.79 up only 8 cents, yesterday. Ahead of New York’s opening silver stood at $31.70.

Gold _{(very short-term)}

We still expect gold soon, to move strongly, one way or the other, in New York shortly.

Silver _{(very short-term)}

We expect silver soon, to move strongly, one way or the other, in New York shortly.

Price Drivers

Gold & Silver –

Yesterday saw New York attempt to make gold break out to the upside, but it retreated back to the mid-point of its consolidation trading range. So we do not consider yesterday’s move to $1,682 to be the breakout. It closed just 50 cents lower in New York than the day before. This shows that the buyers and sellers are roughly in balance. So any physical action should tip the balance one way or the other in a strong move. So the market should become volatile soon.

Importantly, it is clear to Technical experts that the support at $1,650 is huge and unlikely to be broken unless there is a major change in the fundamentals driving the gold price.

The Yen is now 94 to the U.S. $ and looks set to weaken further, much to the delight of Japanese exporters who, from the Yen’s high of 76 are now getting a Yen income of nearly 24% more than they were. In the tough times they would have cut costs to remain profitable so this increase represents pure profit. That’s why the Nikkei index in Japan is nearly 4% higher today. But Japanese investors are smart. They are under no illusion that the fall in the Yen will be seen there as a cheapening Yen. Hence, investors know that the depreciation of the Yen is the cost of the attempt to resuscitate the Japanese economy by the authorities and will look to protect themselves. So we expect to see gold play a more significant role in Japanese portfolios from housewives to the leading funds. As this is one more attempt to undermine one of the two strongest currencies in the world, over time, markets will stop looking to any particular currency as a safe-haven. . [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com]. This includes the Swiss Franc.

Silver –Silver has built huge support from $27 to $29 leaving the current price only around 10% above long term support. Silver fundamentals are unlikely to change either.

Regards,

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