Silver Market Morning

Gold Today – The gold eased slightly to $1,581.10 in New York, yesterday. In Asia and London it added a dollar before Fixing at $1,582.50 and in the euro at €1,216.372, while the euro was $1.3010. Ahead of New York’s opening, gold was $1,593.70 and in the euro at €1,221.83.

Silver Today – Silver rose slightly to close at $28.98 in New York yesterday. Ahead of New York’s opening silver stood at $29.27.

Gold _{(very short-term)}

Gold is still consolidating but in a very tight range and soon to move strongly either way, which we may see, in New York, today, or sometime this week.

Silver _{(very short-term)}

Silver is still consolidating but in a very tight range and soon to move strongly either way, which we may see, in New York, today, or sometime this week.

Price Drivers

Gold & Silver – The tightening trading range of gold has been going on for a fortnight so far. This is an exceptionally long time for such a move. This tells us that whichever way it goes it will signal a longer term direction for gold. The move is also more likely to be either a large one or a change of direction.

With the global equity markets rising to record levels investors may be tempted to believe that they are signalling economic growth. We don’t see that, despite the over-optimistic ‘spin’ being put out on this. Economic reports, at best, are signalling a ‘flat line’ recovery and at worst, more declines into recession. France’s economy is now signalling that it is getting messy and may enter a triple-dip recession. Italy’s economy is in a better shape but the country is rudderless.

More importantly, traders have attempted to push gold further down, but demand from China, in particular, has pushed prices back up. This leaves traders with diminished long positions and elevated short positions. Each day that this happens, leave traders more vulnerable because of one simple fact. Asian buying does not have to sell to close a position. They take delivery and keep the gold they buy. Traders have to close their positions because they want short-term profits.

The only other factor on the trader’s side is potentially even more selling from the gold Exchange Traded Funds. This could still be triggered by a sharp drop in the gold price again. [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com]

Silver – Silver is being highlighted in the media now as having a better future as 53% of supply is used in industrial applications now, but the investment side is rising at the same time. Price-wise we see it continuing to be led by gold, even though it will outperform it soon.

Regards,

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