Silver Market Morning

Gold Today – In New York on Friday the gold price fell to $1,608.90 down $27 then bounced in Asia to $1,615 ahead of London’s opening. It then Fixed at $1,611.25 down $18 and in the euro at €1,206.39, down €15, while the euro was $1.3356. Ahead of New York’s opening, gold was $1,611.80 and in the euro at €1,206.52.

Silver Today – Silver closed at $29.80 down 65 cents down 2% on Friday. Ahead of New York’s opening silver stood at $29.98.

Gold _{(very short-term)}

We expect gold to consolidate around current levels, in New York today.

Silver _{(very short-term)}

We expect silver to consolidate around current levels, in New York today.

Price Drivers

Gold & Silver – On Friday both gold and silver lurched lower again making the fall just over 4% on the week. At the moment it looks as though it has bounced off $1,600. What is clear is that prices below $1,600 will attract buyers in volume. Take a look at the Rupee price of gold. It now stands at Rs.87,658.16 an ounce, a price that has not been seen since May of last year. India is still in the midst of the marriage season and nothing spurs an Indian investor quicker than a low price he thinks will rise. But the same is likely to happen to buyers in other parts of the world, so we are watching this consolidation carefully now to see if it will hold. Indian investors are happy with buying low, but developed world investors want to buy just ahead of the rise, so the next question to be asked is, “If the consolidation holds, when will the rise come?”

There used to be seasonality in the gold market, with May to end-August being the Doldrums, but then due to other unseasonal factors, record gold prices were seen in gold, two years ago in this period. It was thought that the high point would be somewhere between September and May but that changed too. We have to conclude that gold and silver peak prices are no longer seasonal, but that the monetary and investments drivers of their prices are unseasonal and have come to dominate the gold and silver price.

With this in mind we look at the G-20 meeting where global finance chiefs signaled Japan has scope to keep stimulating its stagnant economy as long as policy makers cease publicly advocating a sliding yen. Translated, this means you can continue following policies everyone knows will weaken your currency, so long as you don’t say you are weakening it. [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com]

Silver –Silver continues to follow gold down, but is sitting in the midst of support levels.

Regards,

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