Silver Market Morning

Gold Today –New York closed at $1,314.10 down $5.60 on Friday. Asia took it higher to $1,320 and London opened a dollar lower than that. At the Fix, gold was set at $1,316 a dollar down on Friday’s Fix. In the euro it Fixed at €962.270 almost the same as Friday’s Fixing. Ahead of New York’s opening gold stood at $1,316 and in the euro at €964.42, while the dollar broke down to new recent lows.

Silver Today – Silver closed at $21.88 up 8 cents on Friday. Ahead of New York’s opening it traded at $22.10.

Gold _{(very short-term)}

The gold price should consolidate in New York, today.

Silver _{(very short-term)}

The silver price should consolidate today, in New York.

Price Drivers

Friday saw the break up, through resistance, being digested, as it will be all of this week. Selling from the U.S. based gold ETFs stopped too. There were no sales from the SPDR gold ETF holdings on Friday leaving its holdings at 882.227 tonnes and purchases to the holdings of the Gold Trust of 0.01 tonnes left them at 173.15 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]

Asian demand started the week forcefully, lifting gold prices $5 dollars, with its presence, rather than the amount of the rise, being significant to this week’s gold price. Like an unstoppable tide it continues to persist no matter what. Reported Chinese imports [which are likely to be an understated figure] of gold are running at a minimum of 6.4 tonnes a day this year to the end of September on top of the 440 tonnes mined internally. This is getting pretty close to annual, newly mined, global production levels, allowing for drops in production levels at these very low gold prices, lower than makes mining in the bulk of gold miners viable. As to scrap sales, we look at India where scrap sales are evaporating. At higher prices they contributed an additional 50% to mining supplies [1,400 tonnes of the 4,000 tonnes total of annual supplies]. We have a long way to go before prices are high enough to resuscitate scrap sales, in volume.

‘D-Day - 86’....................The only way the U.S. government can again act effectively is after the elections, which may produce a clear win for one side or the other in both houses. This will take more than a year to happen. The realization that the problem is structural has been now accepted and foreign strategies regarding U.S. investment are being reviewed, to the detriment of the U.S. As part of the negative image the U.S. banking and monetary system the U.S. has is the report that J.P. Morgan Chase has accepted a fine of $13 billion making around $20 billion in fines if late. They now want to regain the trust of the people. With no criminal charges against individuals inside the bank doing things that warrant these fines, this is wishful thinking. It only adds to the trust that gold is garnering.

Silver – The silver price continues to want to rise, not fall, so we expect it to hold its ground and wait for the gold price to rise.

Regards,

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