Silver Market Morning

Gold Today –New York closed at $1,412.00 up $27.10 yesterday after which Asia took it down to $1,405, before London held it there. It then Fixed lower at $1,405.25 up $8.50 and in the euro at €1,074.697 €2 while the euro was stronger at €1: $1.3076. Ahead of New York’s opening gold stood at $1,397.80 and in the euro at €1,067.59.

Silver Today – Silver closed at $22.75 up 57 cents in New York on Friday. Ahead of New York’s opening silver stood higher at $22.45.

Gold _{(very short-term)}

The gold price will see more consolidation with a slightly weaker bias, in New York today.

Silver _{(very short-term)}

The silver price will see a more consolidation with a slightly weaker bias, in New York today.

Price Drivers

Gold & Silver – So far in the last fortnight we have seen the gold holdings of the SPDR gold ETF rise by 0.771 tonnes leaving New York with a stronger bias in gold. Asian demand remains strong but not as exuberant as in May. Consequently, the gold price is building a positive foundation around $1,400. [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com] What is very clear now is that the speculative short positions in gold have dropped dramatically with COMEX telling us, because of this, that they expect prices to rise.

Add to this the ongoing demand from Asia and you have a similar position that you had before the dramatic fall of the gold price, but this time pointing up. A physical buying spree by the banks and hedge funds would make price rises rapid.

We have the impression that many different financial markets are going through an indecisive period, much as one sees on the sea shore when the tide is changing. Indeed listening to the daily news from different parts of the world confirms this, such as a now stronger Yen when it should be weakening, one bank saying China is contracting and official figures saying it is expanding. In the U.S. yields are rising as a pullback in QE is being discounted, but rising yields could easily damage expected growth and economic growth data remains lackluster. The important factor that investors should be aware of is the media have been taking a positive ‘spin’ on small data, which then disappoints. In Europe for instance the ‘spin’ is that ‘manufacturing is not declining as fast as before’. This is a long way away from, “we are experiencing a recovery.’ Once a clear direction is given by the developed world economies we see markets moving rapidly that way, either up or down. Consequently, we repeat. “The present gold market scene tells us that we will see volatile markets in the short-term in both gold and silver.” We now add to that, ‘after the current consolidation around $1,400 is complete.

Silver – We continue to expect silver prices to have a good week following gold as the mood in the silver market is changing alongside that of gold.

Regards,

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