Silver Market Morning

Gold Today – Gold closed in New York at $1,467.30 in New York on Friday. In Asia it continued to rise back to $1,472level despite the closure of the Chinese markets. The Fix was set at $1,472.50 in London up $10 on Friday and in the euro at €1,125.506 up €2 while the euro was at €1: $1.3083. Ahead of New York’s opening it slipped slightly at $1,471.90 and in the euro at €1,125.35.

Silver Today – Silver closed at $23.90 down 40 cents, in New York on Friday. Ahead of New York’s opening silver stood at $24.33.

Gold _{(very short-term)}

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

Silver _{(very short-term)}

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

Price Drivers

Gold & Silver – COMEX believes gold will fall heavily this week as we see by the extent of the short positions there. Asia will increase its demand if this is the case and we see another “Bear Raid”. However, if the raid does not come then we could see a classic squeeze of shorts, the like of which we haven’t seen before. [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com] Today the Chinese gold markets are closed taking an important element of demand out of the market. India is open and appears responsible for the $5 price rise in gold overnight. But, we ask, “ is this enough to deter the ‘bear raiders’?

With this threat continuing to hang over the market and with the Technical picture looking poor while China is closed, the temptation to ‘short’ the market may prove too strong today. However, the robust Asian demand persists, so they could be deterred. The result is that this week should give us a handle on the market’s mood is and its future direction. We expect it to show that global markets believe that prices should be higher as robust physical demand is attempting to remove stock in the market at current levels.

The seller of the shares of the SPDR gold ETF is adding to the pressure, but we see the market realizing that once the selling stops the remaining holders are likely to be long-term holders only. This places a full-stop on U.S. gold selling. With demand at current levels, there will be a physical shortage in the market that will force prices up. We are hearing from many, many quarters now that the physical shortages are becoming chronic already and this shortage is now global.

Silver – Silver is has returned to cautious mode as its moves once again lag that of gold. With its heavy industrial demand it is seen as being vulnerable to a downturn in the developed world, but the demand for this metal if from a ‘need’ sector and not from a discretionary sector. Consequently we do not expect to see demand for it falter, with a downturn. So, we expect it to continue to follow gold’s price in the future.

Regards,

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