Silver Market Morning

Gold Today – The gold closed in New York at $1,599.10 yesterday. In Asia and London it traded then down slightly to $1,595.30 then it rose ahead of New York’s opening to $1,599.30 and in the euro at €1,251.75 while the euro weakened to €1: $1.2776.

Silver Today – Silver closed at $28.70 in New York, yesterday. Ahead of New York’s opening silver stood at $28.37.

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 Forecaster has been forecasting the advent of Capital & Exchange Controls for several years. They have arrived in the developed world now.

As part of the Eurozone the trouble really started in Greece, where the loss of up to 75% effective on Greek Bonds devastated the holdings of Cypriot Banks. This is why this healthy cash-rich nation hit the wall. As part of their ‘bailout’ Cyprus is imposing Capital Controls, but using a currency that is far too strong for the mauled nation. This implies that the currency controls that are to be imposed will have to be far stronger and imposed for a long time if they are to be effective. We are in no doubt that the impact of these on the owners of capital still in Cyprus, already facing 40%+ losses will see their capital trapped, emasculated, for a long time to come. To date we are of the opinion that Cyprus has not affected the gold price. The lessons of the total impact on Cyprus still have to be absorbed by investors. Its effects will be structural, elevating the way gold protects wealth in a damaged currency while being held solid over time by global forces. The number of nations with AAA ratings has dropped 60% in the last few years measuring the decay of currencies. With so many developed world currencies plagued by over-indebtedness and struggling to grow, as Asia continues to drain the developed world, the prospect of more crises grow more certain by the day. Capital will run from these dangers quickly now as growing uncertainty makes investors skittish.

Meanwhile gold remains, “money, in extremis”! It is favoured more and more by emerging central banks and Asian investors. With so much inherent trust in the monetary system, still, in the developed world, investors are proving slow to realize its crisis value. [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com] While speculators and traders continue to try to break the gold price down they are struggling to do so.

Silver – Silver is still marking time despite the strength of its fundamentals. But it will take more total global growth for this to shine through in a higher silver price. Meanwhile silver should move up as it has fallen with the euro today.

Regards,

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