Silver Market Morning

Gold Today –New York closed on Monday at $1,236.50 up $15. This morning in Asia it lifted to $1,256 but London pulled it down to Fix it at $1,252 up $26.50 on yesterday’s Fix and in the euro at €972.578 up €54.216 showing gold moving independently of the euro. Ahead of New York’s opening gold was trading at $1,249.35 and in the euro at €971.05.

Silver Today – Silver traded at $19.06 up 20 cents in New York. Ahead of New York’s opening it had risen to $19.17.

Gold _{(very short-term)}

While the consolidation continues we see this week defining the next direction in New York.

Silver _{(very short-term)}

While the consolidation continues we see this week defining the next direction in New York.

Price Drivers

Gold & Silver – Quite remarkably a large tonnage of gold has been sold ahead of the weekend and yesterday from the SPDR gold ETF. The total amount has been 18.79 tonnes, which should have knocked the gold price back through to the mid to higher $1,100 area. So the question we asked yesterday, regarding sales from the SPDR gold ETF, “if they do continue, will they be enough to overwhelm demand,” has now been answered. As we also said yesterday, “As those who have read our latest article on demand and supply you will see that demand is not the key factor now!” [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com] It would be surprising if speculators had changed direction, but the falling supply levels may well be beginning to impact the gold price, because for the gold market to absorb 18 tonnes extra of gold is a statement of the fact that this extra tonnage was not enough to overwhelm normal demand levels in the daily gold market. We cannot emphasize this enough as such tonnages have been the cause of the gold price slippage and directly assisted the ‘bear raiders’ efforts in mid-April. If we are right about gold supply, then the sales from the SPDR gold ETF will be sidelined, no matter what. The gold and silver prices may well produce some unexpected surprises this week. This is the time to be ready for a lot of action and be agile in your investments. We suggest you keep your eyes firmly fixed on the gold price now.

But we continue to caution that SPDR gold ETF sales must halt for a week before we are convinced that they have halted. Now we would also like to see if the strength in the gold price can continue to absorb high sales from the SPDR gold ETF. That need only take the balance of this week. Needless to say, there is no clear certainty in the direction of the gold price, as these supply and demand flows battle it out. But we continue to believe that this week will confirm the next direction for gold.

Silver – The silver price is proving cautious still as it remains an American market following the gold price, but showing a reticence to do so in the last month or so, behaving more conservatively.

Regards,

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