Silver Market Morning

Gold Today –New York closed at $1,329.40 down $3.60 on yesterday. Asia allowed it to slip slightly to $1,327 and then London came in to take it down to $1,322.40 ahead of the Fix where it was Fixed at $1,322.25 and in the euro at €996.646 down €4.60. Ahead of New York’s opening gold was at $1,322.85 and in the euro at €996.57.

Silver Today – Silver closed at $19.84 down 19 cents in New York yesterday. Ahead of New York’s opening it traded at $19.60.

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 no sales from the SPDR gold ETF on Monday starting the week with the total of the SPDR gold ETF and the Gold Trust at 1,106.205 with the SPDR gold ETF at 927.355 tonnes, while the Gold Trust gold holding stood at 178.85 tonnes.

At the morning Fix the gold price pulled back within its recent trading range. However, the changes in gold and silver prices are narrowing signalling that we are soon to see a strong move either way in their prices. In the last two days we have seen the Fixing once more dominate the gold price, indicating that physical demand there is strong while trading outside the Fixing is thin, as is reported. [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com]

In China the premium over the gold price that gold sells for continued at high levels at $16 while in India it stood at $10 up from last week’s $4 as the government’s import curbs began to bite. In July according to India’s Finance Minister gold imports jumped, after a quiet previous two months. We do see Indian gold importers using whatever they can to bring in gold ahead of the start of the Indian festive season so that they can profit from the rising premiums we expect to see then. We expect these to continue to rise from now on and increase the profitability of such imports. Smugglers are doing the same thing for the same reasons. The big question in India is, “If the government curbs are successful, just how high will that premium rise to?”

In terms of the global gold price, a combination of premiums in India and in Asia demonstrates just how much physical demand there is at present. It is a tidal flow that is big enough to overwhelm the overall economic considerations of the developed world and points to a higher gold price for the foreseeable future.

Silver – Professional silver investors continued to buy the shares of the Silver Trust this week adding another 294.06 tonnes to their holdings in the ETF. This is a very large amount for a single day, equaling the entire amount bought last week. This makes over 1,000 tonnes bought in the last month into the Silver Trust. Again we say, this is why the silver price should outperform the gold price once prices start to rise strongly.

Regards,

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