Silver Market Morning

Gold Today – The gold closed in New York at $1,604.40 yesterday. In Asia and London it traded then down slightly to $1,602.55 then it Fixed lower at $1,597.25 and in the euro higher at €1,241.354, while the euro was $1.2867. Ahead of New York’s opening, gold was $1,598.55 and in the euro at €1,242.22.

Silver Today – Silver closed at $28.81 in New York, yesterday. Ahead of New York’s opening silver stood at $28.78.

Gold _{(very short-term)}

Gold will continue to consolidate around $1,600, in New York today.

Silver _{(very short-term)}

Silver will continue to consolidate, in New York today.

Price Drivers

Gold & Silver – The gold price performed remarkable overnight. There was a determined speculative effort to shove the gold price down to $1,590, which failed and the gold price fought its way back to $1,604 where it closed in New York last night. We see this as significant because it tells us that short-term demand for gold is strong and immediate just below $1,600. It tells speculators and traders that the downside risks are now greater than the upside risks. Traders and speculators are not crusaders so will happily change to the long side if that’s where the profits are. Please note it is higher in the euro and lower in the dollar!

The relief over the Cyprus deal was short-lived and uncertainty now taints the Eurozone crisis as it is recognized that the rules have changed regarding debt and banking crises. Deposits in the bank of debt-distressed nations are expected to be heavily cut back should nations such as the P.I.G.S. face the need for a ‘bailout’ or ‘bail-in’. This is now an established fact of life there. One cannot stress enough just how much damage this has done to the structure of the financial side of the E.U. We will have to wait for the next crisis before we see the impact on the structures. It goes to the credibility of the system more than anything else. In so doing the role that gold will play in shoring up the E.U. monetary system, in time, will likely be enhanced. The certainty that gold supplies in extreme times has just been emphasized by the E.U. whether they recognize it or not. [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com]

Meanwhile the emerging nations are continuing with their plans to found their own “World Bank” and possible “I.M.F.” This affirms our expectations of the world splitting into two, possible three massive trading blocs with their own ‘free trade zones for themselves. It also emphasizes the expected rise of currency instability in the years to come as the interests of these blocs oppose each other.

Silver – Silver is trying to copy gold’s behaviour, but is still showing a tendency to be cautious before doing so.

Regards,

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