Silver Market Morning

Gold Today –New York closed at $1,393.90 down $17.90 on Wednesday. Asia let it slip to $1,390 ahead of London’s opening. London saw it see-saw until it was Fixed at $1,391.75 and in the euro at €1,054.596 down just over €11.00. Ahead of New York’s opening gold was trading at $1,393.60 and in the euro at €1,055.76.

Silver Today – Silver closed at $23.53 down 73 cents in New York on Wednesday. Ahead of New York’s opening it traded at $23.50.

Gold _{(very short-term)}

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

Silver _{(very short-term)}

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

Price Drivers

Gold & Silver – What has not been talked about in the media is the way that emerging market currencies have been allowed to fall and why. We see the central banks of these nations, whether it is India or South Africa or the other ‘fragile five’ currencies, act in the same defensive manner. Taking a lesson from China and Japan, these currencies have been allowed to fall without extensive efforts to prop up their exchange rates. Most have very large reserves built up when the funds came in from the low interest rate-developed world in 2008 and onwards. By not defending the exchange rate they have improved their international competitiveness and retained healthy reserves against future international crises. It is clear that the emerging world is becoming ready for the strains of the entrance of a global, multi-currency monetary system as well. The price they have and will pay is heavy inflation in the days to come.

The effect overall has been to lower the value of their currencies both internationally and internally. This may well lead to the appearance of growth, but it is a false growth. In terms of gold and silver, with the currencies cheapening like this, the price of gold in these countries will rise in local currency terms, as we have seen of late. Governments are fully aware of this too. This is why countries like China are actively encouraging the acquisition of gold by their citizens too. [We cover that in our weekly newsletter - Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com]

The SPDR and Gold Trust gold ETF holdings remained unchanged yesterday. The total of the SPDR gold ETF holdings is now 919.228 tonnes and the holdings of the Gold Trust stand unchanged at 178.2 tonnes, together totalling 1,097.428 tonnes.

Silver – The silver price is waiting for a clear direction from gold, which won’t come until the consolidation is over..

Regards,

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