Silver Market Morning

Gold Today –New York closed at $1,315 on Thursday and it fell further in Asia and London. Asia watched it slip a dollar back further to Fix at $1,308.25odown nearly $65 in a fall reminiscent of the ‘bear raid’ in April. In the euro it Fixed at €984.461 down €24. Ahead of New York’s opening gold was trading at $1,314 and in the euro at €988.90.

Silver Today – Silver closed a dollar down makinit a near $1.50 fall in two days in line with gold. Ahead of New York’s opening it traded at $21.70.

Gold _{(very short-term)}

The gold price may return to a consolidation phase around $1,300, today in New York.

Silver _{(very short-term)}

The silver price may return to a consolidation phase with gold, in New York today.

Price Drivers

Gold & Silver – The gold price is now just about on support in the Technical picture. The precipitous fall was in the absence of selling from the U.S. Prices at these levels will encourage physical buying from investors worldwide as well as central banks. We expect the next month to see a volatile and very changeable market that may well confuse investors in precious metals.

The situation in India with government blocking imports and looking into ways to ‘harness’ privately owned gold gives a fascinating picture into what can happen to gold when a nation is under pressure on its Balance of Payments, which India is. It would be accurate to say that the Indian government is manipulating the gold market tremendously, but we do recommend that investors take a close look at events there to see what can happen to your gold when government gets involved. We do not believe this to be the only country to contemplate the road they are now walking there. Ostensibly the government has blocked gold imports to lessen the Current Account Deficit. They have been exploring ways to get privately held gold into the banks over whom the government exercises control, through the “Save Gold Campaign”. As we reported yesterday, they have now started gathering statistics on the gold held in Temples and no doubt to get an initial reaction to the probability of government “harnessing” this gold to support foreign loan requests. To date gold dealers and commentators have been careful to say little about the possibility/probability of confiscating gold or other ways of putting it under government control. But we see clearly now the exploration of the avenues to achieve this are being explored! [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 were unchanged on Thursday. The total of the SPDR gold ETF holdings is at 917.126 tonnes while the holding of the Gold Trust remains at 177.56 tonnes, together totalling 1,094.686 tonnes.

Silver – The silver price despite stronger fundamentals is following the gold price.

Regards,

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