Silver Market Morning

Gold Today – Gold closed in New York at $1,558.70 down $26.20 on yesterday. The gold price was Fixed in London at $1,555.75 and in the euro at €1,189.593, while the euro was at €1: $1.3078. Ahead of New York’s opening it traded at $1,559.15 and in the euro at €1,187.15.

Silver Today – Silver closed at $27.60 down 36 cents in New York yesterday. Ahead of New York’s opening silver stood at $27.60 barely changed.

Gold _{(very short-term)}

Gold will test support, which should hold, in New York today.

Silver _{(very short-term)}

Silver will mark time while watching gold, in New York today.

Price Drivers

Gold & Silver – Nearly 17 tonnes of gold was sold from the SPDR gold ETF yesterday, making over 23 tonnes sold from there in the week so far. In addition Cyprus announced the sale of 10 tonnes from its reserves of 13 tonnes as a token gesture for the “bail-in” it was forced to swallow.

It is possible that investors were spooked by the sale of Cyprus' reserves of 10 tonnes. As we mentioned last week, the sales from the gold ETF is dominating the gold price at the moment.

Having said that, we expect central bank gold purchases this month to be high, as the quantity of gold in the market place is now greater from the gold ETFs. Central Banks would simply accept the offer of the gold and not chase prices, so such buying would not be apparent in the gold price, it would simply soften the fall. The gold price is back to tong-term support at $1,560 for the third time lately. Once again the gold price is at a critical level while we wait, not for the rise, but to see if it will fall further. [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com] In the States gold is being talked down on the back of the potential for interest rates to begin rising from the end of the year, while the economy improves. Such a view both ignores recent history and the currency world, as well as the fact that the only way the U.S. economy can affect the gold price is through sales from the SPDR gold ETF, which we are seeing now. Once that selling halts events in the U.S.A. will have a far smaller impact on the gold price.

This month and next are good demand months for gold from Asia, this year, as more and more middle classes are added to the number of gold buyers, so we should see demand from there, better than last year.

Silver – Silver is not following gold up and down in tandem at the moment. It did match gold’s rise but has not fallen with it, yet. It appears to see gold’s fall as temporary.

Regards,

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