Silver Market Morning

Gold Today –New York closed at $1,285.10 up $1.50 but down $18.80 on the day before. Asia saw the gold price lifted to $1,290. It then Fixed in London at $1,287.75 down $4.25 and in the euro at €964.246 down nearly €8.80. Ahead of New York’s opening gold was at $1,288.65 and in the euro at €965.03.

Silver Today – Silver closed at $19.51 down only 1 cent in New York yesterday. Ahead of New York’s opening it traded at $19.75.

Gold _{(very short-term)}

The gold price will still have a weaker bias today, in New York.

Silver _{(very short-term)}

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

Price Drivers

Gold & Silver – Yesterday saw sales of another 4.51 tonnes of gold sold after the sale of 2.103 tonnes from the SPDR gold ETF the day before. While the smaller sale on Monday caused the gold price to slip, yesterday’s larger sale did not as it rose back to $1,290. It appears that demand is responsive to prices below $1,300 now. Nevertheless sales from gold ETFs in the U.S. continue to restrain the gold price. This left the total of the SPDR gold ETF and the Gold Trust at 1,088.129 with the SPDR gold ETF at 910.529 tonnes, while 0.76 of a tonnes of gold was sold from the Gold Trust leaving its gold holdings at 177.60 tonnes. The gold market remains thin. [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com] Perhaps the pertinent question to begin asking is, “Has U.S. influence over the gold price begun to wane?” Why pertinent? Because once sales from the US. Gold ETFs halt, U.S. sales of gold will diminish to the point that the U.S. gold markets will not have the capacity to lower gold prices. But they will have the ability to raise them.

There has been talk about U.S. banks ability to lower the impact of demand through slowing deliveries of gold at the warehouses they own. This can and we are sure does happen as is being evidenced in enquiries into bank activities in the commodities market. But of greater impact at the moment is the slowness of deliveries into Asia [primarily India and China] where premiums are reflecting such physical gold shortages. In China it appears to be a logistical problem which could be easily overcome, should suppliers wish it to be. But in India, it is government restrictions, as they change the terms of importing. The net effect is that the full impact of Asian demand is not currently being felt in the gold market. We believe that this has to have only a short-term effect as different routes and shippers are found to remove such bottlenecks.

Another changing sight in the gold market is that while the dollar weakens against the euro, [which now stands at €1: $1.3354] gold is weakening with the dollar and is not strengthening with the euro. So we ask, “Has gold decoupled from the euro as a counter to the dollar?”

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

Regards,

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