Silver Market Morning

Gold Today – Gold continued to move higher, closing at $1,430.40 down$15.5 in New York yesterday. In Asia and London it continued to rise back to $1,447.80 ahead of the Fix. The Fix was set at $1,446.50 up $22 and in the euro at €1,107.07 up nearly €12 while the euro was at €1: $1.3066. Ahead of New York’s opening it slipped slightly at $1,445.30 and in the euro at €1,105.31.

Silver Today – Silver closed at $23.18 up 23 cents on yesterday’s close, in New York. Ahead of New York’s opening silver stood at $23.28.

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

Price Drivers

Gold & Silver – The selling of gold from the SPDR gold ETF continued in New York yesterday as another 13 tonnes was sold. This makes a total of 41 tonnes sold this week into a market whose supply is usually around 11 tonnes a day. However, Asia more than swallowed this amount whole and lifted the price again to nearly $1,450. In total, over the last two months the amount sold from gold ETFs and COMEX warehouses is close to 400 tonnes. In the face of this, the gold price is now recovering. When this happens, either gold ETFs remain at lower levels or have to buy their gold back from rapidly declining stocks in the ‘open’ market. Likewise COMEX will need to replenish stocks from the same market.

The physical market is seeing rising demand and not just from retail Asian demand. In the developed world gold stocks are dropping at an accelerating rate from COMEX warehouses the SPDR gold ETF as well as other E.T.F.s. At first glance it looks like U.S. institutional holdings of gold have dropped heavily, whereas foreign and individual holdings of gold are shooting through the roof. We have to wait for the month end before we know just what emerging world central banks have been doing during this time, but we believe they too have been taking advantage of the appearance of extra physical stocks of gold during the last month. If the ETF supplies of gold stop, there is nothing to stop the p

To emphasize the need to join fundamental research together with Technical research we note that at a time when the gold price should be following a new downward trend it is in fact recovering under the pressure from physical markets outside the developed world’s. This tells us that scant attention is being paid to the Technical picture by the emerging and central bank worlds. It has to be said that the gold market is unlike any other market, including silver. With dark clouds on the horizon of the monetary world and a stumbling economic recovery in the developed world, the monetary aspects of gold will increase in importance! [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com]

Silver – Silver is recovering slowly and falling behind gold now.

Regards,

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