Silver Market Morning

Gold Today –New York closed at $1,289.90 down $37.90 on yesterday. Asia took it to $1,390 and London started to lift it to $1,292 ahead of the Fixing, which was set at $1,293.75 again higher than the market but down from yesterday’s $1,332.25 a fall of $38.50. In the euro it Fixed at €955.926 with the dollar staying at weak levels. Ahead of New York’s opening gold was trading at $1,291.70 and in the euro at €954.83.

Silver Today – Silver closed at $21.18 a fall of 49 cents yesterday. Ahead of New York’s opening it traded at $21.17.

Gold _{(very short-term)}

The gold price should again consolidate around $1,300 with a stronger bias, today in New York.

Silver _{(very short-term)}

The silver price should again consolidate with a stronger bias, today in New York.

Price Drivers

Gold & Silver – Both sides of the U.S. Congress and Senate, went into the shutdown with determination, so an early backing off by either side is unlikely. We are of the opinion that both sides are prepared for a confrontation over the debt ceiling and maybe into a U.S. default. For gold and silver investors the next 17 days will see a growth of uncertainty which will favour gold. But the real drivers of the gold price appeared yesterday in Asia:

- In China [on holiday yesterday] the government is to increase the number of gold import licenses to include non-banking importers, which will include Chinese manufacturing companies. It is clear that the government of China wants to accelerate the buying of gold in China. With their middle classes growing by the day in terms of numbers and wealth, this is in a country that is mining 440 tonnes of gold a year now and importing over 600 tonnes p.a. of it already.

- In India the gridlock in gold imports at the ports is over and gold is reaching wholesalers. In line with this the premiums on gold there have dropped to single figures down from $40 an ounce previously. Gold importers will be buying again after more than a two months of close to zero imports after an average of 70 tonnes a month previously. And this is just ahead of the major ‘festival of lights’ where it is auspicious to buy gold.

[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]

No sales from the U.S. gold ETFs took place yesterday. The selling appeared to come from speculators knowing that ‘stop loss’ positions would be triggered by a fall to below $1,300. As such we see any physical demand that enters the market now as meeting little overhead resistance until it reaches the price it fell from yesterday. The total of the SPDR gold ETF holdings stands at 905.990 tonnes and the holding of the Gold Trust stand at 177.65 tonnes.

Silver – The silver price suffered the strong fall but less than gold but should recover faster than gold now.

Regards,

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