Silver Market Morning

Gold Today – Gold continued to move higher, closing at $1,414.90 down$10.5 in New York yesterday. In Asia and London it rose back to $1,425. The Fix was set at $1,424.5 up $7.25 and in the euro at €1,095.516 up nearly €4 while the euro was at €1: $1.3003. Ahead of New York’s opening it slipped slightly at $1,421.85 and in the euro at €1,092.30.

Silver Today – Silver closed at $22.95 down 42 cents on yesterday’s close, in New York. Ahead of New York’s opening silver stood at $22.97.

Gold _{(very short-term)}

The gold price will continue to consolidate, in New York today.

Silver _{(very short-term)}

The silver price is expected to have a stronger bias, in New York today.

Price Drivers

Gold & Silver – the selling of gold from the SPDR gold ETF continues to press gold prices down in New York yesterday as another 9 tonnes was sold. This dropped the gold price $10 but Asian demand lifted it back to where New York started yesterday. The amount sold from the SPDR ETF is now approaching 300 tonnes over the last two months.

However, it is important to realize that the key to the fall in the gold price was having around 100 tonnes of physical gold with which to swamp the market quickly. The 400 million ounces sold in the futures market, was not physical and has little to no effect on the gold price because of this. The 400 million ounces sold took cash off futures contract holders and gave it to the banks that ‘raided’ the market there. Any losses suffered selling the physical gold was borne by bank clients holding physical gold that was sold then and through sales triggered by the fall.

But the real physical gold market is now buying gold at bargain basement prices which is why the Asian demand is so strong. The gold sold in the U.S. is simply moving eastwards following the decade’s long shift in power and wealth to Asia. That process is osmotic and should continue for the next decade at least. [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com]

With Swiss institutions rejecting U.S. Taxpayer clients because of the exposure of the U.S. based operations investors are worried about safe places to hold their gold and many U.S. citizens feel Canada is a good alternative to Switzerland. We are of the opinion that Switzerland remains the best place to retain gold and wealth provided you find the right company to hold it for you [admin@stockbridgemgmt.com ]. It must be remembered that Canada is almost entirely dependent on the U.S. for its economic success and is unlikely to hold out in the face of pressure from the U.S. As regards Canada being a “Safe Haven” for gold we feel that it too will respond to pressure from the U.S. and may well join the U.S. in any action taken against owning gold there. History reinforces this opinion as it does Switzerland, which held out against all sides in the last three centuries.

Silver – Silver is waiting for gold to give it a clear direction still.

Regards,

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