Silver Market Morning

Gold Today –New York closed at $1,367.10 down $16.70 on Tuesday. Asia held the price there ahead of London’s opening. In London it was Fixed at $1,366.00 down $12.50 and in the euro at €1,019.86 down €10.50 while the euro was slightly stronger against the dollar at €1: $1.3394. Ahead of New York’s opening gold stood at $1,368.00 and in the euro at €1,021.51.

Silver Today – Silver closed at $21.61 down 22 cents in New York on Tuesday. Ahead of New York’s opening silver stood higher at $21.66.

Gold _{(very short-term)}

We expect the gold price to be volatile, in New York today.

Silver _{(very short-term)}

We expect the silver price to be volatile, in New York today.

Price Drivers

Gold & Silver – Yesterday saw the SPDR gold ETF sell 1.503 tonnes of gold leaving the fund holding 1,001.665 tonnes on its books. This was sufficient to disturb the gold price taking it down to 1,367.10 at the close of New York.

With the Fed due to make a statement today, the market is reading that an announcement to taper QE is virtually certain. If disappointed equity markets will fall and Treasury yields drop. This may also deter further sales of gold from the SPDR gold ETF. If the Fed does announce a tapering of QE we will see what gold is left in short-term traders hands in the gold ETF. It may come out then with Treasuries falling and equity markets becoming exuberant.

As we said yesterday, “the consolidation process in the short-term is coming to an end as the trading range tightens. We do expect to see a strong move this week, but which direction remains to be seen.” The move was down and today could see the completion of the move.

With so much anticipated today from the Fed, we expect all financial markets to be volatile today. It is certainly not a place for widows and orphans. The market is emotional and not moving on the fundamentals but on hopes. We suggest investors stand back and keep their eyes on the bigger picture that we highlighted yesterday. [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com]

We do see a fundamentally changing scene in the gold market, one in which today’s price drivers appear oblivious to, focused as they are on the short term. We see, within the year, their influence diminish considerably. We live in an age of consequences and these will be seen in the precious metal markets, silver included.

Silver – Silver’s is moving in tandem with the gold price again.

Regards,

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