Silver Market Morning

Gold Today –New York closed at $1,368.70 down $25.20 on Thursday. Asia lifted it to $1,372 before London let it slip back to $1,369. London saw it see-saw until it was Fixed at $1,368.25 down $23.50 and in the euro at €1,042.238 down just over €11.70. Ahead of New York’s opening gold was trading at $1,369.15 and in the euro at €1,043.68.

Silver Today – Silver closed at $23.21 down 32 cents in New York on Thursday. Ahead of New York’s opening it traded at $23.17.

Gold _{(very short-term)}

The gold price should show a weaker bias, today in New York.

Silver _{(very short-term)}

The silver price should show a weaker bias, in New York today.

Price Drivers

Gold & Silver – Overhead resistance at $1,400 turned the gold price back and pointed it down, but it tells us to expect less than a 5% fall. With the fundamental picture at the start of the ‘gold season’ and continual robust Chinese demand [up 12% in July over June] this appears to be a short-term correction at the moment.

Indian premiums are lower indicating that newly imported supplies are reaching the point where they are being dealt in India already. Reports of higher ‘scrap sales’ reflect the record levels of the Rupee price for gold, but may also be smuggled gold in disguise.

The new governor of the Reserve Bank of India announced a "swap line" for foreign currencies worth some $10 billion. No further details of the arrangement were given [was gold pledged as collateral?]. But this line can be used to defend the Rupee exchange rate for a time at least. But eventually it will have to be unwound. As we pointed out yesterday, it may not be in the interests of India to use the swap to lift the exchange rate, merely to stop any ‘brutal’ declines, such as those we have seen of late. The implications for Indian gold demand, we believe will be to increase demand as the festival season demand kicks in. A more stable exchange rate will also take the spotlight off gold imports there. Internationally, it means that gold demand overall will increase as Indian demand comes back into play. [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 again remained unchanged yesterday. This adds to our belief that we are seeing a short-term correction with U.S. supply absent still. The total of the SPDR gold ETF holdings is at 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 following gold both directions still, so may be weaker again today, with gold.

Regards,

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