Silver Market Morning

Gold Today –New York closed at $1,306.30 down $13.00 on yesterday. Asia held gold there ahead of London’s opening. At the Fix, gold was set at $1,298.00 down $11 on yesterday. In the euro it Fixed at €959.56 down €8.75. Ahead of New York’s opening gold was trading at $1,300.00 and in the euro at €960.97.

Silver Today – Silver closed at $21.85 down 45 cents on yesterday. Ahead of New York’s opening it traded at $21.89.

Gold _{(very short-term)}

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

Silver _{(very short-term)}

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

Price Drivers

Gold & Silver – 7 days left before the ‘debt ceiling’ issue reaches ‘Default-Day’ and talk of raising the ceiling for up to six weeks is coming out of government in the U.S. We have added a countdown in the number of days to default not with that day in view, but to highlight that each day causes deeper and wider damage to global confidence in the U.S. system of government and its impact on foreigner’s financial interests. The closer we get to ‘D-Day’ the more permanent the damage inflicted on global financial confidence becomes. The issue is the extent to which bickering politicians in the U.S. can have on the global monetary system and its different facets. Global money managers, out of a need for responsible management, have to explore ways to reduce their vulnerability to this scene. Failure to do so would simply make them victims. This is adding to the allure of gold constantly, but this is not reflected in the daily price, but to long term strategic requirements.

The gold price did not fall because of sales of gold from the U.S. so there was no real substance to the price fall.

There were no sales of gold sold from the SPDR or the Gold Trust gold ETFs yesterday. The total of the SPDR gold ETF holdings stands at 898.184 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. It is often assumed that if the gold price falls in Asian time it is because Asian investors are selling. The same is true of either London or New York time, but investors should note that U.S. banks can sell anywhere, anytime. Therefore, a bank like HSBC can sell gold from the SPDR gold ETF in Asia as well as in London or New York, wherever it suits its book to do so. Hence, it has the capacity to sell in a way that can make the gold price fall in thin markets or to rise there. We are looking at this in our current series of articles on how gold markets can portray a different picture to the realities of demand and supply. [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]

Silver – The silver price will follow gold up today.

Regards,

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