Silver Market Morning

Gold Today –New York closed at $1,385.40 up $7 on Monday. China remains closed until Thursday. London opened weaker slipping back to $1,369.30 ahead of the Fix. It then Fixed at $1,369.50 down $7.25 and in the euro at €1,031.095 down €10.792 while the euro was stronger against the dollar at €1: $1.3282. Ahead of New York’s opening gold stood at $1,374.15 and in the euro at €1,034.36.

Silver Today – Silver closed at $21.91 up $0.34 cents in New York yesterday. Ahead of New York’s opening silver stood higher at $21.67.

Gold _{(very short-term)}

We again expect a consolidation at lower levels in the gold price, in New York today.

Silver _{(very short-term)}

We again expect a consolidation at lower levels in the silver price, in New York today.

Price Drivers

Gold & Silver – While New York tried to go stronger and did so, the absence of the Chinese physical demand is clearly apparent in the gold market and, by extension the silver market.

The U.S. based gold ETF the SPDR saw buyers come in and buy 2.706 tonnes of gold. This explained the strength in the U.S. gold market yesterday.

We are seeing a pattern of the physical precious metal markets falling in London’s morning then in the U.S. bouncing. If the U.S. fails to come in like this again today, we will see prices fall until the Chinese return from holiday the day after tomorrow. But with U.S. buyers of the shares of the SPDR gold ETF appearing, we may see the market mood change for the better before they return to the market. We repeat what we said yesterday, the market will be, “an extraordinarily volatile one, both ways”, this week. [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com]

We have been watching the euro continue to strengthen against the U.S. dollar throughout the week, letting the gold price fall further and faster against it. The movements of the gold price this week have nothing to do with currency moves at all. Even the currency moves are due to interest rate differentials and not a reflection of the U.S. or E.U. economies.

Silver – Yesterday the silver price was stable after the heavy fall the previous day, but that was likely due to no new short positions in the market place. Silver’s moves with gold have little to do with the underlying supply and demand factors in the silver market. We repeat what we said yesterday, “This implies, as with gold, that again, the week should be volatile both ways this week. We expect silver to be more volatile than gold this week, after its very steady performance of last week.”

Regards,

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