Silver Market Morning

Gold Today –New York closed at $1,319.70 up $40.25 on Thursday. Asia let it slip slightly to $1,316 before London right at the opening took it up to $1,322. At the Fix, gold was set at $1,317 up $8.50. In the euro it Fixed at €962.086 up just over €2. Ahead of New York’s opening gold stood at $1,321.40 and in the euro at €964.42, while the dollar broke down to new recent lows.

Silver Today – Silver closed at $21.80 up 53 cents on Thursday. Ahead of New York’s opening it traded at $21.99.

Gold _{(very short-term)}

The gold price should be stronger in New York today.

Silver _{(very short-term)}

The silver price should be stronger today, in New York.

Price Drivers

Short covering is the prime reason for gold’s surging through resistance to reach present levels as the U.S. and its major banks are squeezed by rising prices. But longer-term U.S. gold owners in the U.S. gold ETFs still sold gold, despite the change of direction of gold. There were sales of 3.302 tonnes from the SPDR gold ETF holdings yesterday leaving its holdings at 882.227 tonnes and sales from the holdings of the Gold Trust of 1.06 tonnes leaving them at 173.14 tonnes. [Find out more from www.GoldForecaster.com and www.SilverForecaster.com to subscribe to our newsletters and visit www.StockbridgeMgMt.com to hold gold so it can’t be seized]

We attribute this wrong-footing to a U.S.-centric view of gold when gold is far bigger than that. Because of the activities of U.S. institutions in the gold market we gave importance to the crisis there. But the true consequence of the crisis is the damage done to the global monetary system in its entirety. We now label that crisis; ‘D-Day - 89’....................Renewed talks on the U.S. Debt Ceiling crisis begin again next week. What we have been through in the last month, we will see stretched over 3 months, with critical points reached in two months. More important than that crisis is simply the excess printing of dollars, impacting all global financial markets. There will be no escaping of the consequences, even though superficially we see relative currency calm. The collapse of confidence in the dollar will not be against other currencies, but will bring the system down in its entirety, unless measures are taken to shore-up confidence by the inclusion of monetary assets outside of currencies. As the well researched World Gold Council’s OMFIF report concludes, gold will have to be elevated into a pivotal role to provide that confidence. Europe [see Draghi’s of the ECB’s comments this week] sees gold as such support, as does China. India, too, is exploring ways of saving itself, from itself, by using non-government gold [there is over 20,000 tonnes of gold held inside its borders] in support of the Rupee. Gold’s progress to a resuscitated support role to the current monetary system is inexorable and in line with the decay of confidence in the dollar.

Silver – the silver price moves like a cat; still, then rushes one way or the other, and is then still again. But now it has been given a clear direction by gold.

Regards,

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