Silver Market Morning

Gold Today – In New York the gold price rose $4.50 to $1,677.50, yesterday. In Asia on Monday it traded just below that level and then Fixed at $1,675.75 in London, and in the euro at €1,235.986, while the euro was $1.3558. Ahead of New York’s opening, gold was $1,675.65 and in the euro at €1,235.50.

Silver Today – Silver closed at $31.83 up only 4 cents, yesterday. Ahead of New York’s opening silver stood at $31.77.

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 –

It is becoming clear that the new government in Japan will insist that more be done to lift the inflation rate to 2% and that translates directly into a lower yen. In the past it has traded at 110 to 120 to the U.S. dollar and it seems that the government wants a three figure Yen to the dollar rate. This is already translating into a larger demand from Japanese investors for gold and should continue to do so.

Meanwhile, across in India the government is making clear that it is adopting an anti-gold stance as they threaten to curb Indian bullion imports. The Reserve Bank of India is to attempt to address the country’s current account deficit through curbing gold imports. These contributed to nearly 30% of the deficit last year whereas between 2006 and 2009 it was 20%. The rise in the gold price helped to account for much of this rise.

But the Indian people with the cash culture they have and their determination to keep buying gold will simply do what they have done in the past and buy gold smuggled into the country. As it is, already around a quarter of the gold flowing into India is coming in through smuggling. It is unlikely that the Indian Gold investor will cooperate much with the government schemes because inevitably it opens up the investor to additional interference from the government and its agencies. We wait to see the effectiveness of any monetization of gold they propose. [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com]. All attempts in the past to curb gold imports, including banning its import failed and simply went underground.

Silver –Silver is waiting for gold to break one way or the other and is likely to move further in percentage terms that gold is. There is a build-up of pressure in the silver price that will see it move strongly.

Regards,

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