Silver Market Morning

Gold Today –New York closed at $1,336.00 up $12.30 on Friday. Asia took it to $1,342.40 and London pulled it back slightly ahead of the Fix which was set at $1,335.75up $14.25 on Friday. In the euro it Fixed at €989.591 up nearly €11.00 with the dollar almost unchanged on last week. Ahead of New York’s opening gold was trading at $1,336.80 and in the euro at €993.89.

Silver Today – Silver closed at $21.72 on Friday, only 2 cents higher than the day before. Ahead of New York’s opening it traded at $21.73.

Gold _{(very short-term)}

The gold price should continue to consolidate now at the top of its trading range, today in New York.

Silver _{(very short-term)}

The silver price should barely move, waiting for gold, in New York today.

Price Drivers

Gold & Silver – Asian demand is sufficient to lift the gold price ahead of London’s opening. This week could be very important for gold!

The developed world’s ‘hung’ governments are on the brink of inflicting harm on their economies. In the U.S. the failure to address national issues looks like closing government down and by the 18^th of October the impasse could see the U.S. facing a credit rating write-down once more. Yes, we all expect a last minute reprieve on the ‘debt ceiling’ to avoid deep damage, but expect the next three weeks to be full of politicians strutting across the world’s media with a finger pointed at the other side. This is gold positive.

Over in Italy the farce that is the Italian government is headed for a vote of confidence that it may well lose, miring Italy in inaction too. On top of that we fully expect the Eurozone crisis to come out of its summertime sleep.

The tightening of gold’s trading range is centered on $1,330 and we are above that, promising a vigorous and probably volatile week. 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. [Find out more from www.GoldForecaster.com and www.SilverForecaster.com to subscribe for our newsletters and visit www.StockbridgeMgMt.com to hold gold so it can’t be seized]

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.

There was only 1 tonne of gold sold from the two gold ETFs in the U.S. last week, with the Gold Trust seeing over half a tonne bought into it. This tells us that U.S. gold selling has almost stopped and so this source of supply that we have seen from the beginning of the year is no longer exerting downward pressure on the gold price. Will this week see the U.S. buying now?

Silver – The silver price is marking time waiting for the gold price, ahead of a strong move.

Regards,

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