Silver Market Morning

Gold Today –New York closed at $1,390 down nearly $4.00 on Monday. Asia held it there ahead of London’s opening. London held it there before it was Fixed at $1,391.25 a repeat of yesterday and in the euro at €1,056.057 up just over €3.50. Ahead of New York’s opening gold was trading at $1,394.20 and in the euro at €1,058.12.

Silver Today – Silver closed at $24.08 down 35 cents in New York on Monday. Ahead of New York’s opening it traded at $24.21.

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, in New York today.

Price Drivers

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

In India, Rupee weakness continues as India sees its economic crisis worsening. The Rupee is now at Rs.67.97 and still falling. The government there appear to be incapable of handling the crisis, trying short-term measures to cut the Trade deficit. With elections on the horizon measures taken are being tempered by the impact they may have on voters. When extrapolating the situation there we do expect the Rupee to keep on falling and for a repeat of 1991’s crisis to replay. It may well also involve the use of gold to increase India’s international currency credibility. This remains a developing crisis. [We cover that in our weekly newsletter - Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com]

The other drama of the day remains South Africa where over 140,000 miners are going on strike today. It appears that the mining industry, to remain viable, needs a gold price over R1,5000, platinum over R17,000 while the Rand is at R10: $1. Workers are struggling to make ends meet and find Unions taking advantage of this to gain greater power amongst themselves by promising up to 60% pay increases. If the mining companies give way and offer much more than the 6.5% they are offering now, they will have to close unprofitable shafts and fire workers. The only other solution is to let the Rand drop beyond R12: $1. We think this will happen, adding to the list of nations that have to suck up greater inflation through rising trade deficits.

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 showing greater strength than gold, marginally.

Regards,

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