Silver Market Morning

Gold Today –New York closed at $1,373 up $1010. Asia took it to $1,378.00. London then pulled it back to $1,373.40 before it Fixed in London at $1,375.25 up $14.50 and in the euro at €1,032.386 up nearly €11.00. Ahead of New York’s opening gold was at $1,376.50 and in the euro at €1,032.014.

Silver Today – Silver closed at $23.18 up $0.25 in New York yesterday. Ahead of New York’s opening it traded at $23.33.

Gold _{(very short-term)}

The gold price should prepare for an assault on $1,400, today in New York.

Silver _{(very short-term)}

The silver price will continue to be robust leading the way up, in New York today.

Price Drivers

Gold & Silver – Friday saw more purchases of the shares of the SPDR gold ETF of 2.404 tonnes worth of gold. Again the positive attitude of U.S. investors added to the solid tone of the gold market continued to take gold higher with silver leaping ahead in its rise to well over $23.00. The Technical picture confirms the breakout now and looks to conquer higher levels. The total of the SPDR gold ETF now stands at 915.323 tonnes and the holdings of the Gold Trust stand at 177.60 tonnes, together totalling 1,092.923 tonnes. Gold has now risen nearly $200 from its low or 16.5% from its low point of $1,180.

An ongoing drama that is now helping investors get a deeper understanding of why gold is such an important investment is taking place in India. [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com] The Indian Rupee is accelerating its decline and this morning stands at Rs.62.72 against U.S. $1. The measures against precious metal imports are in place and have brought the ‘official’ imports of them virtually to a halt. But the Rupee continues to slide. We await an extension of Capital Controls from just Indian nationals to foreign investors. We see the decline of the Rupee, right at this moment, a reflection of the fear that these controls will block the exit for foreign investors completely. Essentially the Rupee is falling because of rising U.S. interest rates forcing the “Carry Trade” to pull in their horns and because the economic outlook for India is discouraging foreign investors from investing there. The result is that confidence in the Rupee itself is waning. What better reason then for Indians to invest in gold, one of the few options left to them to protect the wealth they now have. The loss of confidence in the currency is a structural problem that will not respond to superficial government action. The gold price there will rise to reflect the fall in the Rupee.

Still on the currency front the U.S. dollar is strong against other currencies except the euro which is now up to $1.3334 against it. This reflects the different interest rate levels as well.

Silver – The silver price is now outpacing the gold price rise.

Regards,

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