Silver Market Morning

Gold Today –New York closed at $1,242.20 down $10.50 on yesterday. Asian demand came in and lifted it by $4 and in London it was Fixed in London at $1,246.00 down $14.75 on yesterday’s Fix and in the euro at €962.162, while the dollar against the euro was stronger at €1: $1.2950. Ahead of New York’s opening gold stood at $1,246.15 and in the euro at €961.68.

Silver Today – Silver closed at $19.34 down 26 cents in New York yesterday. Ahead of New York’s opening silver stood higher at $19.53.

Gold _{(very short-term)}

We expect a volatile gold price with a weaker bias, in New York today.

Silver _{(very short-term)}

We expect a volatile silver price with a weaker bias, in New York today.

Price Drivers

Gold & Silver – With the World Gold Council ETFs plus the Gold Trust now standing at 1,490.18 tonnes, down from Friday’s 1,492.94 a fall of 2.761 tonnes of which 1.221 tonnes were sold Monday and 1.54 tonnes yesterday, the sales from the U.S. based gold ETFs continues, but at a slower pace, allowing the gold price to consolidate at these levels.

Over in Europe fears of a new chapter in the Eurozone sovereign debt crisis have appeared as Portuguese government ministers continue to resign amid ongoing austerity policies. One of the structural defects of the E.U. is that such financial policies caring for national purses and ignoring voter’s purses, in a Democracy, usually leads to a collapse of government. In the Eurozone these are common at times of crisis. Now the voice of the electorate is being heard and it is angry in Portugal, as youth unemployment is so high that talk of a ‘lost generation’ is common there. Germany remains determined to keep austerity reins on the E.U. and peripheral southern states are balking at this. Germany is saying that the weaker nations in the E.U. should be more like them. With elections due later this year in Germany they have to say this, but markets are not reacting well as Portuguese bond yields are at 7.94%, a level above what Portugal is capable of bearing. The euro at $1.2961 is weakening, but with other currencies also falling against the U.S. dollar it is clear that this is a strong dollar and not a weak euro. [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com]

Further to our comment that 10-year, U.S. Treasury bond prices could be down by 25% in a year’s time, the exit from fixed interest funds continues at quite a rapid pace even in the popular PIMCO funds. This is a general selling in that market, across the board. We mention PIMCO simply because that well managed fund will not be immune from an exit with the broad spectrum of interest rates rising. .

Silver – The silver price is back to moving with the gold price continuously. But there is a consolidation process under way in both markets now, which should continue for the rest of the week at least.

Regards,

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