Silver Market Morning

Gold Today –New York closed at $1,282, down $12 yesterday. Asia held it there before London picked it up slightly, where it was Fixed at $1,285.00 and in the euro at €979.42 up €0.44 while the dollar was slightly stronger against the euro at €1: $1.3120. Ahead of New York’s opening gold stood at $1,285.00 and in the euro at €978.82.

Silver Today – Silver closed at $19.63 down nearly a dollar in New York yesterday. Ahead of New York’s opening silver stood higher at $19.78.

Gold _{(very short-term)}

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

Silver _{(very short-term)}

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

Price Drivers

Gold & Silver – Friday saw the SPDR gold ETF sell another 5.411 tonnes on top of the 4.21 tonnes of gold sold on Thursday leaving the fund holding 985.733 tonnes down from 989.942 tonnes a fall of 4.21 tonnes a fall of 13.8 tonnes in the last three trading days. We continue to wait to see these sales cease before we see a rebound in the gold and silver prices.

Meanwhile, emerging world central banks continue to accumulate gold in their reserves. Russia, Kazakhstan, Azerbaijan, Kyrgyz Republic and Turkey all increased their gold reserves in May. Russia added 6.2 metric tons to 996.2 tons. Kazakhstan added 4 tons to 129.5 tons. Turkey’s holdings rose 18.2 tons to 445.3 tons in May.

Please note that Kazakhstan and we believe Russia don’t enter the open market in London to buy, but simply pay their local miners for their gold and add it straight to their reserves. In this way they market only sees a fall in supply, not a buyers taking gold at the London Fixes. The advantage is that they then only need to refer to London prices at the Fix as a market related price at which they pay their miners but in local currency. Other nations do the same. After all, the sight of central bankers in the open market would send prices racing up. This way, they are not seen at all. [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com]

Again we need to emphasize that central banks are not sensitive to gold prices as their programs are the long-term acquisition of gold for their reserves. When the day does arise that they need to use their gold as an internationally accepted asset with which to cover needed imports gold prices will likely bear no resemblance to those we see today.

Silver – The silver market continues to follow gold.

Regards,

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