Silver Market Morning

Gold Today –New York closed at $1,327.80 down$8.20 on yesterday. Asia took it to $1,329.45 and London held it there ahead of the Fixing, which Fixed higher than the market at $1,332.25 down from $1,335.75 yesterday but still above the mid-trading range. In the euro it Fixed at €983.138 down €6.4 with the dollar weakening still. Ahead of New York’s opening gold was trading at $1,330.70 and in the euro at €982.43.

Silver Today – Silver closed at $21.67 yesterday, only 5 cents lower than yesterday. Ahead of New York’s opening it traded at $21.73, the same as yesterday.

Gold _{(very short-term)}

The gold price is at the midpoint of its trading range and is ready for a very strong move soon in New York.

Silver _{(very short-term)}

The silver price is at the midpoint of its trading range and is ready for a very strong move soon in New York.

Price Drivers

Gold & Silver – The U.S. government is shutdown and the next 18 days will see a worsening of its impact on the U.S., its financial system and its economy so long as it continues. Inside the U.S. it is viewed as a short term problem that will be resolved by the end of the next 17 days. If not, then the U.S. is likely to be downgraded in credit markets, its economy will falter and confidence in the U.S. as leader of the global economy will stumble. We will know that on the 18^th day.

Outside the U.S. we believe the damage is seen as more structural because the problem will is seen as a long-term governing structural problem. In such a climate gold will be attractive as a ‘safe haven’ globally!

If there is no resolution within the next 17 days we see the potential for an impact on the global system equal to the mid-2007 credit crunch. This will be more than a ‘game of chicken’ as it has been building up for years now. [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]

Uncertainty has taken over inside and outside the U.S. If not resolved, we will see instability take over from uncertainty. This is gold positive.

There was a large sale of 3.604 tonnes which initially dropped the gold price before it recovered. The total of the SPDR gold ETF holdings stands at 905.990 tonnes and the holding of the Gold Trust fell to 177.65 from 178.08 tonnes [down 0.43 of a tonne], together totalling 1,083.64 tonnes. We saw this as a precautionary lowering of risk. Today will see U.S. gold market views as they digest the shutdown.

Silver – The silver price continues to mark time waiting for the gold price, ahead of a strong move.

Regards,

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