Silver Market Morning

Gold Today – Gold closed in New York at $1,469.90 up $0.70 in New York yesterday. In Asia, gold fell $11 to $1,458. London pulled it up to $1,464 before it Fixed at $1,463 and in the euro at €1,118.673 while the euro was at €1: $1.3078. Ahead of New York’s opening it stood at $1,464 and in the euro at €1,115.68.

Silver Today – Silver closed at $24.00, in New York yesterday. Ahead of New York’s opening silver stood at $23.83.

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 – The very big news of the day has gone unnoticed by the gold and currency markets. It is that China has signaled it is going to propose plans this year to allow freer flows of the Yuan both in and out of the nation as part of measures to loosen control over the Yuan and interest rates. Most observers were expecting this to happen in around another five years. It is understandable that the process will be gingerly handled, so as to dovetail into the currency world without causing crises there. We have to always remember that China is and will do what suits China and not the outside world. But the inescapable conclusion we have to reach is that the Yuan is set to replace the U.S. Dollar to a greater or lesser extent as it arrives on the world stage. Inevitably, this will lead to more global uncertainty and instability as dollar hegemony is cracked and more currency volatility results in the currency world.

We feel that it is inevitable that, in line with the World Gold Council sponsored OMFIF report on the subject, gold will move to a pivotal role in the monetary system over time. [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com]

It is the beginning of substantial structural changes to the global financial system and in particular to the gold world. This will happen at a time when the developed world’s financial system is at a structurally weak stage, struggling to precipitate economic growth and somehow coordinate the 3-speed growth within itself, without heading into extended recessions across it.

It is certainly time to stand back from a local national perspective and extrapolate the global economic and financial currents. We believe that the demand for gold and silver will find another factor in the growing monetary role precious metals are going to play in the future.

Silver – Silver is not a monetary world according to the present perception market’s have. We don’t expect it to move to that position until gold is accepted as such. Then it will come to have a more important investment role as a ‘safe haven’ in private hands, before it moves to any minor monetary role. But the 40-year long experiment in currencies, without precious metals as an anchor may well be stumbling irretrievably.

Regards,

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