Silver Market Morning

Gold Today – In New York the gold price stopped falling and closed at $1,651.50, yesterday. In Asia and in London it traded just below that level and then Fixed at $1,648.00 in London, and in the euro at €1,223.55, while the euro was $1.3469. Ahead of New York’s opening, gold was $1,648.25 and in the euro at €1,222.10.

Silver Today – Silver closed better at $31.11, yesterday. Ahead of New York’s opening silver stood at $31.04.

Gold _{(very short-term)}

We expect gold consolidate, in New York today.

Silver _{(very short-term)}

We expect silver to consolidate, in New York today.

Price Drivers

Gold & Silver –

Gold hit support yesterday at $1,650 but the Chinese holiday continues to keep Chinese retail demand out of the market. We expect central banks to be able to pick up all the stock they want for this month in the market place. So expect emerging market central bank figures for this month to be bigger than usual. [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com].

We saw that G7 officials released a statement saying that “the macroeconomic policies will be conducted based on domestic objectives and will not be used to target exchange rates.” This appeared to comfort some and make them believe that the “Currency War” was not on. We ask you to read this portion of the statement carefully again. Japan wants to boost its domestic based exports? This must inevitably target exchange rates, does it not? Or is that effect an unavoidable consequence? So, if a nation decides to incite inflation, print money and debase its currency is it an accident that it impacts its exchange rates? – oops! We are left open-mouthed when responsible bodies expect us to accept such statements.

What is clear is that Japan, Switzerland, the E.U and the U.S.A. will use domestic objectives in such a way that they target exchange rates. We do expect other nations to see this and to follow suit. We believe that these self-interested objectives will continue to de-base currencies and where there is no coordination between nations [such as between the E.U. and the U.S.A.] it will continue to devalue the currencies they apply to and ensure the currency war is on to the benefit of gold and silver over time.

Silver –Silver was quicker to bounce than gold, but had fallen further. We expect this heightened volatility in silver [as opposed to gold] to continue.

Regards,

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