Silver Market Morning

Gold Today –New York closed at $1,388.50 up nearly $20.00 on Friday. Asia watched it slip a dollar as did London. London saw it slip slightly to Fix at $1,386 and in the euro at Fixed at $1,386.00 up nearly $20.00 and in the euro at €1,050.557 up just under €8.00. Ahead of New York’s opening gold was trading at $1,387.25 and in the euro at €1,052.06.

Silver Today – Silver closed at $23.81 up 60 cents in New York on Friday. Ahead of New York’s opening it traded at $23.73.

Gold _{(very short-term)}

The gold price may show a weaker bias, while continuing to consolidate today in New York.

Silver _{(very short-term)}

The silver price may show a weaker bias, while continuing to consolidate in New York today.

Price Drivers

Gold & Silver – The gold price has, once again returned to challenge the $1,400 overhead resistance. With no attack on Syria expected this week [but probably next week] the consolidation should continue in this battle. We do expect the media to focus on Syria all week, so it is important to factor in the impact such an attack will have on the gold price.

Local currencies go ‘soft’ in a war zone and are difficult to exchange outside the zone. So locals will take their gold, sell it to the souk [gold market there] for cash to survive. People fleeing the country sell what they can and their currency to buy gold because that benefits from tumultuous times and can travel while holding value [like Rolls Royces and mink coats]. Hence the expression, ‘gold is money, ‘in extremis’. Even badly managed government handling of an economy [such as we see in India] allows gold to keep its value while currency values fall.

If the coming attack in Syria does spark a Middle East religious conflagration between Shi’ites and Sunnis, we would expect the same use of gold, as money, from government to individual in the Middle East. This will happen on top of a gold market where the fundamentals already favour a rising gold price! [We cover that in our weekly newsletter - Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com] This demonstrates the inherent quality that gold has as non-government money and which governments will rely on when confidence collapses. The present monetary system relies entirely on confidence to hold it up.

The SPDR and Gold Trust gold ETF holdings again remained unchanged on Friday. This further confirms that U.S. selling has halted. While it lasted, it was an important source of supply to the market. 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 stronger than gold and should remain so this week.

Regards,

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