Silver Market Morning

Gold Today –New York closed at $1,307.70 down $2.60 on Friday. Asia saw the gold price rise to $1,314 ahead of London’s opening. It then Fixed in London at $1,311.00 and in the euro at €986.827 up €14.50. Ahead of New York’s opening gold was at $1,310.40 and in the euro at €987.12.

Silver Today – Silver closed at $19.82 up 16 cents in New York Friday. Ahead of New York’s opening it traded at $19.87.

Gold _{(very short-term)}

The gold price will fight to hold above $1,300 with a weaker bias, in New York.

Silver _{(very short-term)}

The silver price will cautiously follow gold, in New York today.

Price Drivers

Gold & Silver – While the recovery in the gold price was significant on Friday, the Technical position flipped to a weaker bias. It is notable that the Technical picture has flipped three times in the last few weeks, bringing into question just how pertinent a purely Technical viewpoint is at this juncture. It is clear that the fundamentals of falling supply, falling scrap sales and robust Asian demand in gold’s “doldrums”, as this time of the year is called in the jewelry and investment gold front, are supportive of rising prices. We are seeing thin volumes in the market consistent with this, but with the change in the season so close it is difficult to persuade ourselves that we should see a strongly falling gold price. The pattern, to us, is typically indecisive when a major change in fundamental structure is soon to take place. It is a sort of ‘churning’ that can easily mislead investors and a time when one has to carefully balance the Technical picture with the fundamental picture, before acting.

Last week’s sales from the SPDR gold ETF were 6.31 tonnes which left the total of the SPDR gold ETF and the Gold Trust at 1,099.90 with the SPDR gold ETF at 921.045 tonnes, while the Gold Trust gold holding stood at 178.85 tonnes, at the start of this week. Sales this week in a thin market will have a disproportionate impact, but have the stopped or will they continue? Unless even long-term investors in gold are to sell their holdings in U.S. based gold ETFs, we must be approaching the time when only this type of U.S. investor remains a holder in these funds.

The weakening of the dollar against the euro is also having a direct impact on the gold and silver prices and will continue to do so this week.[Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com] As we said at the end of last week;

We expect precious metal markets to remain volatile and surprising!

Silver – The silver price continues to follow gold, cautiously.

Regards,

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