Silver Market Morning

Gold Today –New York closed at $1,309.5 down 45.50 on Monday before rising in Asia to $1,318. In London, it tried to ease but moved back up to $1,320. It then Fixed at $1,317.25 up $3.50. In the euro it Fixed at €985.744 up €1.00. Ahead of New York’s opening gold was trading at $1,319.10 and in the euro at €987.13.

Silver Today – Silver closed at $21.70 down 49cents on Monday before trading in London at $22.00. Ahead of New York’s opening it traded at $22.00.

Gold _{(very short-term)}

The gold price will continue to consolidate with a stronger bias, today in New York.

Silver _{(very short-term)}

The silver price will continue to consolidate with a stronger bias, in New York today.

Price Drivers

Gold & Silver – There is a more positive tone to the market today, ahead of the Fed’s meeting. Markets are expecting the beginning of “tapering” with Fed purchases dropping from $85 billion a month to $75 billion. Yesterday, the markets were reported as not expecting any tapering. With markets so capricious, we expect volatility to increase after the announcement, whatever it is. Investors would do well to make up their mind how to adjust their portfolios before the volatility hits.

It is against this backdrop that gold and silver have a positive tone. Precious metals are sitting on support still, quietly building a base at these levels. We note that physical demand out of China remains robust and we wait for gold stocks in India to be run down before we see the start of gold imports. We expect this shortly.

The dollar continues to be weak against the broad spectrum of exchange rates. We note that nations who are running Current Account Deficits are faring the worst as their exchange rates continue to fall even as the dollar falls. It is in these nations that gold is proving to be the value retainers that gains respect. We are hearing reports that the foreign central banks who are heavily invested in U.S. Treasuries are selling them to avoid the falls in prices and rise in yields. This would certainly contribute to the dollar’s weakening. [Enquire @ admin@StockbridgeMgMt.com to hold gold so it can’t be seized]

The SPDR and Gold Trust gold ETF holdings are unchanged today leaving the total of the SPDR gold ETF holdings at 911.119 tonnes while the holding of the Gold Trust remains at 177.56 tonnes, together totalling 1,088.679 tonnes. We do not expect more sales today.

Silver – The silver price bounces back strongly on positive days, quicker than gold.

Regards,

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