Silver Market Morning

Gold Today –New York’s closed at $1,381 after which Asia lifted it slightly ahead of London’s opening up to $1,385 in London’s morning. It Fixed at $1.384.50 up $5.50 and in the euro at €1,074.005 in London up €6.6 while the euro was €1: $1.2891. Ahead of New York’s opening gold rose again to stand at $1,390.90 and in the euro at €1,065.78 still.

Silver Today – Silver closed at $22.30 in New York yesterday. Ahead of New York’s opening silver stood at $22.34.

Gold _{(very short-term)}

The trading range continues to tighten ahead of a strong move, in New York.

Silver _{(very short-term)}

The silver price will follow gold, in New York today.

Price Drivers

Gold & Silver – The gold price is once more showing a tightening trading range, which is symptomatic of a pending strong move, either way. COMEX is showing that the next move is down, evidenced by the record short position on COMEX. Asia believes that gold is a bargain now which is why there are large premiums on physical gold, particularly 1 kg bars. We are close to the time when the inherent strength of one viewpoint against the other will dominate and for the near future. [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com] Sales from the SPDR gold ETF are continuing with another 7.125 tonnes being sold yesterday, likely at the morning Fixing in London. We note that it is only the U.S. based gold ETF, the SPDR fund that is seeing large sales. Outside of the U.S. gold ETF’s are unmoved. We see this as evidence that U.S. funds are switching to other U.S. markets [likely equities] for shorter term gains.

It is also evidence that gold investors choose gold when the financial scene in their nation looks bleak. We believe that gold is a global economic/financial/systemic thermometer, not a local one. Thus U.S. investors react to their world and Asian investors to theirs. The gold price remains the sum total of these views.

The news out of the U.S. continues to improve, particularly in housing and sentiment. But apart from housing other indicators do not give such a positive, full, economic picture. While the U.S. picture moves slowly towards a recovery, the sales from the SPDR will dominate the market, but once these sales do terminate, the U.S. influence over the gold price will wane considerably. This will be a fundamental adjustment to the gold market and to the gold price.

We would like to emphasize that when these sales do terminate there will be, not simply a short-term recovery, but a resumption of the long-term trend of gold.

The very short-term Technical picture is pointing to a strong move one way or the other.

Silver – The silver price is still steady waiting for a clear direction from gold.

Regards,

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