Silver Market Morning

Gold Today –New York closed on Wednesday at $1,283.70 up $8. This morning, in Asia, gold rose to $1,2990 before London pushed it back over the $1,286 level ahead of the Fix. It was then Fixed at $1,286.00 up $6.25 and in the euro at €981.53 up almost €6.00. Ahead of New York’s opening gold was going firmer at $1,291.65 and in the euro at €983.89.

Silver Today – Silver closed at $19.38 up 6 cents in New York. Ahead of New York’s opening it had fallen to $19.50.

Gold _{(very short-term)}

The gold price will again, have a stronger bias, in New York today.

Silver _{(very short-term)}

The silver price will again, have a stronger bias, in New York today.

Price Drivers

Gold & Silver – There were sales of 2.625 tonnes of gold from the SPDR gold ETF yesterday, leaving its total at 935.168, down 0.902 of a tonne on the day while the Gold Trust gold was unchanged at 178.24 tonnes leaving the total of the two funds at 1,113.408 tonnes.

This again allowed the gold price to climb a bit further. Now it’s looking at $1,300. Will it break through? [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com] In talking to U.S. clients, we were given the impression that there is an absolute belief that U.S. gold investors control the gold price, completely. This ignores the Chinese plus Indian demand of now 1,900 tonnes a year. This excludes all other Asian demand as well as all other demand outside of the U.S. Its demand equates to somewhere around 7% of global physical demand only. So how could investors get this wrong impression? If you add the value of gold mining company shares to the total value of futures and options then that value dwarfs annual physical gold demand and supply, that appears to be true. But the gold price is driven by physical demand and supply only! Not one penny of an investment into gold shares goes to buy physical bullion. On COMEX, if you wish to take delivery of physical gold in that market or sell physical gold there, you have to notify the counterparty in writing, before this can be done. This accounts for around 5% or less of all COMEX transactions, whether futures or options. COMEX warehouse registered gold stocks have fallen to 43% of the level they stood at the beginning of the year. Most of it is wind and surf! Indeed looking at U.S. stocks of gold available to those not holding for the long term and we see that their holding are at between 50 and 60% of the levels they were at, when the year began. The bulk of this is found in the SPDR gold ETF, which is why we watch these numbers so carefully. Once short term holders have sold their positions, U.S. selling will stop and their influence over the gold price wane! That’s unless they become buyers.

Silver – The silver price continues in step with the gold price.

Regards,

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