Silver Market Morning

Gold Today – Gold continued to move higher, closing at $1,388 in New York yesterday. In Asia and London it pushed through $1,400 to $1,411 ahead of the Fix. The Fix was set at $1,414 up $17 and in the euro at €1,080.462 up €10 while the euro was at €1: $1.3087. Ahead of New York’s opening it began to slip at $1,411.55 and in the euro at €1,078.59.

Silver Today – Silver closed at $23.17 slightly down on yesterday in New York. Ahead of New York’s opening silver stood at $23.62.

Gold _{(very short-term)}

The gold price will continue to consolidate with a positive bias, in New York today.

Silver _{(very short-term)}

The silver price will continue to consolidate with a positive bias, in New York today.

Price Drivers

Gold & Silver – Asian demand is strong enough to counter the ‘bear raid’ right now as the price continues to rebound. Only the shareholders of the SPDR gold ETF know whether they will sell again. But even they must be bruised by the ‘raid’ as they sold while the gold price was in a freefall. For the ‘raiders’ the market mood has changed perceptibly making the chance of another raid’s success questionable. If they do intend to ‘raid’ again they will likely wait until the dust has settled and the gold price recover before they try it.

Yesterday saw another 5 tonnes sold from the Gold Trust and SPDR gold ETF, on top of the 56.37 tonnes sold since last Friday, but this was not sufficient to stem the rise in the gold price. [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com] We note the sanguine statements from the Korean and Kazakhstan central bank heads confirming their gold buying programs despite the fall in the gold price. We strongly suspect, but cannot confirm that central banks took advantage of the rise in physical gold supplies to buy gold. News that the Azerbaijani State oil Fund is to buy 10 tonnes of gold this year shows that gold’s virtues have not been soiled by the gold ‘bear raid. In China, gold sales jumped by 150% in Hong Kong and Macau during the 13 April weekend compared with the previous weekend. Customer traffic rose as much as 40% on 16 April from a week earlier. Demand in India, while cautious after the ‘raid’ is strong still with supplies tight. Small bar and coin demand across the world leaped as the gold price fell. Gold dealers in the developed world reported record sales and turnover with buying much stronger than limited sales. It is becoming apparent that the ‘bear raid’ by U.S. funds and banks has reinvigorated demand across the globe. But we should make it clear that the global buyers are cautious professionals buying for the long-term. As such they are providing a strong floor to the gold price at these levels.

While a referendum is to be held on the repatriation of Swiss gold and the instruction to hold 20% of Swiss reserves in gold, it may be years away, but if passed Switzerland must buy another 1,040.1 tonnes!

Silver – We expect silver to experience the ‘shunt’ effect and play catch-up soon.

Regards,

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