Silver Market Morning

Gold Today – Gold closed in New York at $1,456.20 down $16 in New York yesterday. In Asia, gold remained at that level but in London it began to slide. It was Fixed at $1,449.25 down $20 on yesterday and in the euro at €1,114.122 down only €4 while the euro was much weaker at €1: $1.3008 down €0.0128. Ahead of New York’s opening it stood at $1,432.00 and in the euro at €1,102.34.

Silver Today – Silver closed at $23.69 32 cents down, in New York yesterday. Ahead of New York’s opening silver stood at $23.40.

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 SPDR gold ETF has seen sales of another 5.96 tonnes yesterday making 20.83 tonnes on the week. We are wondering if these sales are real or due to the need to balance an internal SPDR formula they must maintain. Yes, it is more likely that they are real sales, but they are being clumsily handled allowing the big banks to force the price down with ongoing ‘bear-raids’. We have to wait for the ‘raiders’ [banks and large hedge funds] to stop. They won’t do this until the SPDR shareholders stop selling. They won’t stop selling until the charts indicate they should. We are waiting with baited breath to see if central banks step up their purchases to match the overwhelming supply. Once this happens, the gold and silver prices will respond to the sudden drop in supply and the predominant demand. [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com] Until then the gold and silver prices are susceptible to heavier sales from the gold ETF.

Bullion Dealers report that massive physical demand continues across the world that is not being satisfied yet. But the buyers of gold are not as agile as the sellers of gold are. HSBC, the Custodian of the SPDR gold is a London gold Fixing member, so able to unload its gold quickly. Buyers are easily swamped by sales of around 16 tonnes a day in a 10 tonne a day market. We would emphasize that it is solely the sellers of gold from the SPDR gold ETF that are responsible for the gold & silver price falls. This makes for a very volatile, short-term market and is not a reflection of the fundamentals behind the gold price. We repeat that scrap sellers are retreating from the market and mines being forced to move from the low-grade ore bodies to the higher grade ore bodies, to lower costs and increase profitability. If the gold price remains at these levels for too long we will see shorter life mines, a drop in reserves, if the mines can do that. Meanwhile supplies are dropping fast outside of those from gold ETFs.

Silver – The silver price is now diving alongside that of gold. Prices this low do not reflect the fundamentals of silver.

Regards,

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