Silver Market Morning

Gold Today – Gold continued to move higher, closing at $1,425.40 in New York yesterday. In Asia it held at $1,423 London then traded it down to 1,411 ahead of the Fix. The Fix was set at $1,417.25 down $8 and in the euro at €1,091.704 down €0.75 while the euro was at €1: $1.2982. Ahead of New York’s opening it began to rise firmly again to $1,426.10 and in the euro at €1,097.38.

Silver Today – Silver closed at $23.37 up 19 cents on yesterday’s close, in New York. Ahead of New York’s opening silver stood at $23.06.

Gold _{(very short-term)}

The gold price will consolidate, in New York today.

Silver _{(very short-term)}

The silver price looks to have a weaker bias, in New York today.

Price Drivers

Gold & Silver – Both Asia and New York were firm yesterday with some selling in London in the morning. We believe this may be from the SPDR gold ETF that continues to sell. Yesterday saw it sell another 19 tonnes. But again this did not deter the gold price. We take this to mean that Asian and Central bank demand is strong enough now to absorb these sales. Strong demand from China showed itself in bullion’s premium on the Shanghai Gold Exchange which moved up to $17 per oz. Similarly, volume on the Shanghai Gold Exchange surged to 43.3 tonnes yesterday from 30.4 tonnes on Friday. This was more than double the volume during the two-day gold price plunge on 12 April and 15 April. Indian demand has jumped with dealers stockpiling. With these low prices, scrap sales are also falling off there.

If SPDR sales fall away we expect the gold price to move strongly up. We are under the impression that this is one large holder closing his position. [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com]

Reports that a Swiss Bank has refused to redeem/repatriate gold above 200,000 Swiss francs and the central bank had instructed them not to do it because it has to do with anti-terrorism and anti-money laundering precautions appear preposterous. Reputable Vaults in Switzerland have informed us that they have not had any such instructions from the Swiss National Bank and that they continue to redeem/repatriate gold on client’s instructions. If the story is accurate, it must be that the particular Swiss Bank involved may have a problem. But the Swiss National Bank has not issued such an instruction. We find the concept that the Swiss would issue such an instruction implausible because it goes to the root of the Swiss stance on foreigner’s assets for 300 years. The Swiss economy relies on protecting foreigner’s assets and providing financial services for them. One wonders if the rumors are simply malicious.

Silver – Silver is struggling to perform ‘normally’ and is facing continued selling pressure. We do expect it to experience the ‘shunt’ effect still and will play catch-up soon.

Regards,

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