Silver Market Morning

Gold Today –New York closed at $1,394.30 down nearly $13.00 on Friday. Asia held it around $1,392 ahead of London’s opening. London held it there before it was Fixed at $1,391.25 down $1.50 and in the euro at €1,052.462 up just over €0.50. Ahead of New York’s opening gold was trading at $1,390.80 and in the euro at €1,052.80.

Silver Today – Silver closed at $23.43 down 42 cents in New York on Friday. Ahead of New York’s opening it traded at $24.05.

Gold _{(very short-term)}

The gold price should continue to consolidate with a weaker bias, today in New York.

Silver _{(very short-term)}

The silver price should continue to consolidate with a weaker bias, in New York today.

Price Drivers

Gold & Silver – The market needs certainty that the gold price will hold at these levels. Once these levels are accepted we see prices rising once more.

In India Rupee weakness looks like pushing inflation up to 10%. Because the government has tried since 2012 to tackle deficits, woo inflows, speed up construction projects and avert a credit-rating cut and have been seen to have failed, the quality of security for foreign loans has weakened. The nation’s vulnerability is being clearly exposed by an unfavorable external environment. The RBI must boost currency holdings to stabilize the Rupee. The options before the bank, include a sovereign-bond issue. [We cover that in our weekly newsletter - Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com]

Net gold imports into China more than doubled in the first half of 2013 to 493 metric tons, up from roughly 239 tons over the same period in 2012. The China Gold Association said gold consumption in China jumped 54% to 706.36 metric tons in the first six months of 2013. Takeovers and asset purchases by China’s gold mining companies reached a record $2.24 billion this year, up considerably from 2012’s record of $1.96 billion worth of M&A activity. Domestic Chinese gold deposits are less than 5% of the global total and cannot supply growing Chinese consumer demand, so Chinese producers are buying up gold companies and mines. We will not be told how much this extra production entering China will go to the government and how much to the consumer markets. But all this production will not reach the open gold market from now on. This translates into dropping supply, not increased demand, so its impact will be unseen except through lower supplies.

The SPDR and Gold Trust gold ETF holdings are unchanged. The total of the SPDR gold ETF holdings remains at 921.030 tonnes and the holdings of the Gold Trust stand unchanged at 178.2 tonnes, together totalling 1,098.329 tonnes.

Silver – The silver price is not falling, so we expect it to outpace it on the rise.

Regards,

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