Silver Market Morning

Gold Today –New York closed at $1,331.50 up $11.60. London pulled it back to Fix it at $1,327.75 up $15.75 on yesterday and was Fixed in the euro at €998.76 up nearly €4.00. Ahead of New York’s opening gold was at $1,329.45 and in the euro at €1,000.72.

Silver Today – Silver closed at $20.20 up 4 cents on yesterday in New York. Ahead of New York’s opening it traded at $20.08.

Gold _{(very short-term)}

The gold price should continue to consolidate with a stronger bias, in New York today.

Silver _{(very short-term)}

The silver price should continue to consolidate with a stronger bias, in New York today.

Price Drivers

Gold & Silver – There were sales of 2.404 tonnes from the SPDR gold ETF yesterday, lowering its total to 927.355 tonnes, while the Gold Trust gold holding remained the same as the day before at 178.85 tonnes leaving the total of the two funds at 1,106.205 tonnes. Once more these sales had no impact on gold prices during the day.

Gold prices rose on the day as part of the consolidation process where the market flushes out buyers and sellers as it moves into balance before the next strong move. The dollar weakened against all currencies as well, which also contributed to the adjustment in the gold price higher. Unless there is a major sale from the SPDR gold ETF we see it unlikely that the gold price will fall below $1,300 in the short-term. [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com]

While there are signs that the Eurozone, as a whole, is coming out of recession, the I.M.F. has pointed out, quite rightly that there exists a danger to the E.U. from a potential ‘tapering’ of U.S. Q.E. They [and we agree] that the Eurozone crisis may reignite and may push the weakest countries into a ‘debt-deflation spiral’. While this may not affect the decision of the Fed whether or not to moderate such objectives in the light of the dangers to the rest of the developed world remains to be seen. What is relevant in this for gold & silver is that it highlights systemic risks to the developed world’s financial system and gives good cause to investors to continue holding gold.

After all the E.U. remains one of the U.S.’ key customers, so a ‘debt-deflation spiral’ there could cause ‘contagion’ threatening the structure of the E.U. itself. Such an event would precipitate another recession and ripple through to the U.S. After all, in this world, no economy, no matter how large, “is an island” and this danger is ‘another toll of the bell!’ This reminds us that although growth is rising in the developed world it is slight, fragile and extremely vulnerable. Gold will benefit from economic growth in the developed world as it equips gold and silver investors to buy more. So long as structural risks continue to threaten gold will remain part of all sagacious investor’s portfolios.

Silver – The silver price showing a clear robust behavior pattern now, signaling the way professional silver investors think the silver and by extension, the gold price is headed.

Regards,

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