Silver Market Morning

Gold Today –New York closed at $1,310.60 down just under $7 on Friday. Asia took gold $5 higher before slipping back $4 ahead of London’s opening. At the Fix, gold was set at market prices at $1,311 down $5 on Friday. In the euro it Fixed at €965.11 down nearly €2.0. Ahead of New York’s opening gold was trading at $1,312.00 and in the euro at €966.5.

Silver Today – Silver closed at $21.68 on Friday. Ahead of New York’s opening it traded at $21.75.

Gold _{(very short-term)}

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

Silver _{(very short-term)}

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

Price Drivers

Gold & Silver – 10 days left before the ‘debt ceiling’ issue reaches default day. With the Republicans regaining composure over the weekend and reinforcing their intransigent posture, we expect a ‘default premium’ to build up on the gold price in New York. Or will it? Is the gold market too savvy to be played with like this?

Don’t be distracted, it is Asian demand that is holding the price up. We remind you that Asia accounts for over 70% of global gold demand, the U.S. 7%. And Asia gives scant regard to a political battle in Washington and won’t react unless there is a debt default. Then the paw-paw hits the fan. Until then expect the best of political histrionics in the U.S.

Asian demand is expected to gain momentum this week, particularly from India now acting in support of robust Chinese demand. In Rupee terms the gold price is 10% off its recent high. With ‘auspicious’ days for buying gold with us, ahead of the big gold buying festivals there, the mood is much better for buying gold in India now. The loss of the premium inside India is a cosmetic factor that will encourage buyers too, but not a material one. The question investors must now ask themselves is, will Asian buying overwhelm traders and dealers managing gold prices moving the gold price based on U.S. political issues in the next 10 days? If a compromise is reached, will the removal of this political ‘soapie’, lower gold prices more than in the very short-term? [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]

There were no sales from the SPDR or the Gold Trust gold ETFs on Friday. The total of the SPDR gold ETF holdings stands at 899.985 tonnes and the holding of the Gold Trust dropped by 0.795 tonnes leaving its holdings at 176.83 tonnes at the start of a noisy U.S. week.

Silver – The silver price continues to ‘mark time’ waiting for gold to give direction.

Regards,

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