Silver Market Morning

Gold Today –New York closed at $1,224.10 77, down $52.90 yesterday. Asian demand came in and lifted it to $1,243. London then resumed a slightly weaker posture dropping it to $1,240.00 ahead of the Fix. In London it was Fixed at $1,232.00 up $3 in the euro at €945.51 up nearly €3.00 while the dollar was stronger against the euro at €1: $1.3030. Ahead of New York’s opening gold stood at $1,233.10 and in the euro at €946.03.

Silver Today – Silver closed at $18.80 down 79 cents in New York yesterday. Ahead of New York’s opening silver stood higher at $18.77, down a dollar.

Gold _{(very short-term)}

We expect the gold price to again consolidate with a weaker bias, in New York today.

Silver _{(very short-term)}

We expect the silver price to again consolidate with a weaker bias, in New York today.

Price Drivers

Gold & Silver – The fall in the holdings of the SPDR gold ETF and Gold Trust continued yesterday but at a slower pace with a fall of 2.32 tonnes being recorded. This was insufficient to overcome Asian, primarily Chinese demand, so the gold price recovered $18.90 ahead of London’s opening. We are now getting a feel for the size of daily Asian demand being around 2 – 5 tonnes on a regular persistent basis. So sales from the SPDR gold ETF above that holds the gold price down. As we keep saying, the gold price will continue to fall so long as the sales from the SPDR gold ETF continue at above 5 tonnes. The difference between Chinese demand and SPDR gold sales is that Chinese demand is persistent, regular and likely to persist on an ongoing basis, while SPDR gold sales will eventually halt completely. The question is when? [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com] This is where gold and silver investor’s focus should remain, because it is such a short-term phenomenon. Once it stops and the global gold fundamentals dominate once more the entire precious metals picture will change dramatically! The lower the gold price goes, the greater the change.

Silver – The silver price falls have been much heavier that those of gold and should continue to be so as the silver market has a far narrower global base than gold. Here we are not talking about demand and supply, but the influence silver investors for investment purposes in developed world markets. This is far greater than it is in the gold price. As such they cause more precipitous reactions in the silver price, but can keep it stable while gold is moving. The U.S. is the prime market for professional investment investors and is the country in which the silver price is made, even though London does have a daily silver fixing.

We expect precious metal markets to become lively both ways in the near future!

Regards,

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