Silver Market Morning

Gold Today –New York closed at $1,252.90up $10.70 on yesterday. Asian demand added nothing to the price. It was Fixed in London at $1,249.50 up $3.50 on yesterday’s Fix and in the euro at €961.154 down €1. New York is closed today as, amazingly, the U.S. continues to celebrate its freedom from the United Kingdom.

Silver Today – Silver closed at $19.80 up 46 cents in New York yesterday. In London it traded down to $19.56.

Gold _{(very short-term)}

We expect the gold price to be quiet in London today.

Silver _{(very short-term)}

We expect the silver price to be quiet in London today.

Price Drivers

Gold & Silver – There were no sales from the SPDR gold ETF yesterday, which is why the gold price rose a little. We have taken a look at the supply and demand fundamentals in the light of the fall in the gold price and will release an article on this once our subscribers have digested it. It paints a remarkable picture of what will happen in the next few months. [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com]

With the heavy drop in the gold price, the damage done to the mining industry has been deep and hard. It has been particularly hard on the ‘Junior’ sector of the industry. However, at current prices the prospects for those mines in that sector that are adequately financed and have low production costs are remarkable because of the value being presented in their prices. One conclusion we can reach now is that gold mining won‘t stop. We have no doubt that, like George Soros, fund managers around the world are looking at these values and will buy up selected shares and lock them away for a brighter day. At these levels not much has to happen to the gold price for these shares to show an impressive rise in value. At these levels, these shares have a leverage to the gold price in them that we do not expect to see for long.

The crisis in Portugal deepened still further with Portuguese 10-year bond yields at over 8%. If the government does collapse we believe that there will be a serious contagion effect across southern Europe. Italy is without a government, Greece in a depression and Spain likely to follow Portugal in bond prices. It is precisely because Portugal has followed austerity measures so thoroughly that contagion may follow its government’s fall. The austerity process has taken far too long and yielded no positive results to date, so that austerity itself is being questioned. But if the crisis does suppurate again it will be far more devastating because of the weakened state of P.I.G.S. nations. With the concept of “bail-ins” now widely known a full blown banking crisis will be part of the crisis now.

Silver – The silver price is back to moving with the gold price continuously, but with wider swings than gold.

Regards,

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