Silver Market Morning

Gold Today –New York closed at $1,232.20 up from the low of $1,181 during the day, on Friday. Asian demand came in and continued to lift gold to $1,238 and it kept on rising to $1,243 where it was Fixed in London and where it was Fixed in the euro at €952.80, up €30, while the dollar against the euro was at €1: $1.3046. Ahead of New York’s opening gold stood at $1,238.64 and in the euro at €949.81.

Silver Today – Silver closed at $19.62 up $1.12 in New York on Friday. Ahead of New York’s opening silver stood higher at $19.50.

Gold _{(very short-term)}

We expect a volatile gold price to try to consolidate above $1,200, in New York today.

Silver _{(very short-term)}

We expect a volatile silver price to try to consolidate above $19.50, in New York today.

Price Drivers

Gold & Silver – No sales were seen on either Thursday or Friday of last week from the SPDR gold ETF. Consequently, both gold and silver jumped as forecast, strongly. But a great deal more needs to be done before this is reflected in the Technical picture. Likewise we need to see quite a few days of no sales before we can be certain that sales from the SPDR gold ETF have halted.

We expect the potential buyers sitting on the sidelines waiting for lower prices, to wait for a complete consolidation before they are convinced that the bottom has been reached before they go into the gold market.

Price premiums in China and in India remain high with Indian premiums climbing steadily as supplies through legal channels are choked off. [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com] But steady and unrelenting demand for gold in China is also being supported by the volatility of other financial markets in China as the government forcefully pressured the banking system to slow lending into the housing market, etc and then prevented the “Lehman moment” from causing a liquidity squeeze. Such discipline shows the control government exerts over the Chinese economy and successfully prevented a disorderly growth. By popping potential bubbles the Chinese economy is turning to more sustainable growth and in turn allowing gold to retain its favoured investment status, supported by government policies.

In India the battle between the government and gold investors continues. This has seen premiums on gold rising continuously and the quantifiable volume of imported gold to drop substantially. The week saw the Rupee exchange rate attempt to recover slightly. We emphasize that the current account deficit is attributable to a distorted economy wherein Indians try to protect themselves from the falling Rupee with gold investments.

Silver – The silver price has rebounded and should continue to do so provided gold continues to recover. We expect it to show greater strength than the gold price.

Regards,

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