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Silver Market Morning

Gold Today – Gold closed in New York at $1,606.40 down $13. The Fixing in London today was set at $1,600.00, stronger than expected. In the euro it was set at €1,261.$432. Ahead of New York’s opening gold stood at $1,600and in the euro, €1,269.96 while the euro was at €1: $1.2681, only slightly weaker.

Silver Today – Silver slipped back to $27.78 down 65 cents in New York then rose back to $28.01 in London’s morning. Ahead of New York’s opening at $28.00.

Silver (very short-term)

Silver may well be to weaker, today in New York.

Price Drivers

Gold –We are of the opinion that once Indian demand sees either a stronger Rupee or realizes that gold is being valued by the wrong instrument and returns to the market and imports gold again, the gold price will move forward in a more robust manner, dominating traders in the West. Currently the price is holding current levels because of growing Chinese demand.

Stand back and take a distant look at the developed world financial markets and ask, “Does the present financial climate generate growing confidence or lowering confidence. Is there a set of factors out there that will generate growing confidence in the financial system or do they point to further degeneration? Is a sale or a purchase of gold warranted?” These will be the developed world factors driving the gold price there, but in Asia investors start with no illusions and just buy gold and silver, as they can.

Meanwhile, after the disappointment of the Fed’s action dampened gold and silver prices, today brings the publication of the audit on the Spanish banking situation. Some see it needing over €160 billion, some less. The worry in the Eurozone crisis has always been that the situation is worse than we are being told and E.U. action, less than needed.

A cautionary note from us is that, the Fed and other monetary authorities in the developed world are focused on preventing deflation only. They are correct in this, for deflation sparks a need for more liquidity. There is a point in that need where deflation can become a ‘black hole’ for liquidity and precipitate a runaway inflation. This is where hyperinflation comes from, not through just runaway inflation itself. [To follow our weekly commentary, please subscribe to our newsletters at and at].

Silver – Silver is following gold as traders push bot metals down but they will respond to the direction the Spanish bank audits gives.


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

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