Silver Market Morning

Gold Today –New York closed at $1,323.70 yesterday, only $1.50 different from last Friday. Asia and London lifted it $2 ahead of the Fix. It then Fixed at $1,321.50 almost the same as Monday. In the euro it Fixed at €978.454, again almost the same as Monday with the dollar steady at lower levels. Ahead of New York’s opening gold was trading at $1,324.05 and in the euro at €980.96.

Silver Today – Silver closed at $21.70 relatively unchanged on yesterday. Ahead of New York’s opening it traded at $21.59.

Gold _{(very short-term)}

The gold price has moved back to consolidate with a stronger bias, today in New York.

Silver _{(very short-term)}

The silver price has moved back to consolidate with a stronger bias, in New York today.

Price Drivers

Gold & Silver – We have been away from the desk for most of this week, so to come back and see the overall week reminded us that it is not always good to look too closely at the minute to minute moves of the market for fear of becoming myopic. What we see from this perspective has been a thin market where dealer’s influence in moving prices in line with their expectations, not through significant active trading. But now we see a tightening of gold’s trading range, warning us of a strong move in the gold price very soon, either way.

While Chinese demand has now overtaken that of India, total demand is suffering from the blocks put on imports by the Indian government. Bar imports to India are down 67.61% in August. But at the same time, U.S. sales of gold from the ETFs there appear to have halted. The total of the SPDR gold ETF holdings stands at 909.594 tonnes and the holding of the Gold Trust remains at 178.08 [up half a tonne], together totalling 1,087.674 tonnes.

We are in the period of strong demand for gold for the rest of the year, so why isn’t this showing itself in the gold price. We are producing a series of articles on “Gold Markets are not Efficient, Don’t Reflect Fundamentals & Understate Gold’s Market Value!” This should answer the question of why the gold price is not accurately reflecting fundamentals. Subscribers will have full access to this series. [Enquire at: admin@StockbridgeMgMt.com to hold gold so it can’t be seized or to www.GoldForecaster.com and www.SilverForecaster.com to subscribe for our newsletters]

The potential shutdown of the U.S. government and coming ‘debt ceiling’ battle in the U.S. are being dismissed as a repeat which won’t affect markets. Because of this politicians may well want to add more bite to it to keep themselves center stage. If this happens we will see a potential downgrading of the U.S. which would reflect the ongoing emasculation of the U.S. government, which should continue until the next set of elections. Markets will then react!

Silver – The silver price is now less volatile than the gold price, ahead of a strong move.

Regards,

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