Silver Market Morning

Gold Today –New York closed at $1,287.40 down $18.90 on yesterday. Asia lifted gold $6 ahead of London’s opening. At the Fix, gold was set at $1,285.75 down $12.25 on yesterday. In the euro it Fixed at €947.145 down nearly €12.5. Ahead of New York’s opening gold was trading at $1,287.00 and in the euro at €960.97.

Silver Today – Silver closed at $21.59 down 26 cents on yesterday. Ahead of New York’s opening it traded at $21.54.

Gold _{(very short-term)}

The gold price should consolidate around $1,300, today in New York.

Silver _{(very short-term)}

The silver price should move tightly with gold, today in New York.

Price Drivers

Gold & Silver – 6 days left before ‘D-Day’....................

When dysfunctional politics reigns over global finance a financial earthquake becomes more than probable, together with the subsequent tsunami flowing across the globe.

But all bets are on a resolution, with banks like Goldman Sachs cockily saying gold is a “slam dunk” fall on government re-opening. This isn’t just myopic it is a warning that they have prepared themselves and their clients to sell and go short the gold market. We link this to the sales of gold sold from the SPDR or the Gold Trust gold ETFs yesterday. The total of the SPDR gold ETF holdings stands at 896.382 down 1.802 tonnes, the same amount as the last sale at the beginning of this week and the holding of the Gold Trust dropped by 0.81 tonnes leaving its holdings to 176.02 tonnes. These are small amounts relative to the daily gold turnover and far smaller than in April, but indicate the U.S. market view.

Could the market withstand a ‘bear-raid’ now? Gold demand from Asia will jump strongly in the event of a sudden large drop in the gold price and in volume terms take off any gold sold out of the U.S., as it did in Aril and turn the gold price around. The size of any new ‘bear raid’ will be far less than the one in April and far less effective but the reaction of Asia, particularly China, will be quicker and larger.

But let’s not get ahead of ourselves, yesterday’s talks were just that, not a resolution. More and likely dramatic moves are still to be made in the next 6 days. A resolution may not come, then will the U.S. go long of gold? If so they will have to join the global herd on that road. We see this story going right to the edge and possibly beyond!

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Silver – The silver price will follow gold today.

Regards,

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