Silver Market Morning

Gold Today –New York closed at $1,415.70 up 70 cents on Wednesday. Asia took it lower to $1,409.15 ahead of London’s opening. The gold price was Fixed at $1,406.25 down $19.25 and in the euro at €1,059.961 down just over €6.00. Ahead of New York’s opening gold was trading at $1,411.15 and in the euro at €1,064.90.

Silver Today – Silver closed at $24.29 down 17 cents in New York on Tuesday. Ahead of New York’s opening it traded at $24.02.

Gold _{(very short-term)}

The gold price should pause and consolidate, today in New York.

Silver _{(very short-term)}

The silver price should consolidate, in New York today.

Price Drivers

Gold & Silver – The Syria factor in the gold price is already waning in the gold market as reflected in today’s lower gold price. We do not see this returning with any weight until a U.S. military strike is happening. Even then we do not see it as important a factor as the other forces driving the gold price, such as falling supply, Asian demand, the cessation of U.S. selling and central bank demand are long-term and substantial. Most of the newsworthy items that are dramatic have little impact on precious metal investors, short-term. Rising oil prices are reflecting the potential conflict in the Middle East, but unless there is a Middle East-wide inflammation of the conflict we don’t see this news as holding oil prices up.

You will note that the fall of the gold price today, was greater in the dollar than in the euro. We expect a weaker euro going forwards as the interest rate differential between the dollar and the euro grows with the speculation that ‘tapering’ by the U.S. Fed is soon to start. We see that as translating into greater rises in the euro than in the dollar, but the influence of the currencies will be far less than in the past. [We cover that in our weekly newsletter - Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com] Yesterday saw the SPDR and Gold Trust gold ETF stay unchanged. The total of the SPDR gold ETF on Wednesday holdings was still at 921.030 tonnes and the holdings of the Gold Trust stand unchanged at 178.2 tonnes, together totalling 1,098.329 tonnes.

The Rupee remains besieged, falling to nearly Rs.69 against the U.S. dollar, before the Reserve Bank of India said it will sell dollars to the nation’s biggest state-run crude oil importers through a swap facility. The Rupee has lost more than 18% this year, and is headed for the worst annual loss since a balance of payments crisis in 1991 forced the nation to put up its gold reserves as collateral to pay for imports. The Indian Rupee is now at Rs.67.36 to the U.S. $. These measures can only have a marginal, temporary impact on the exchange rate, implying that we can expect more and more permanent Capital Control measures shortly.

Silver – The silver price will pause with the gold price before outpacing it on the rise.

Regards,

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