Silver Market Morning

Gold Today –Gold barely moved in New York yesterday. Asia also let it sit there and London took it $3 lower up to the Fix. At the Fix, gold was set at $1,3111.75 down $4.25 on yesterday’s Fix. In the euro it Fixed at €959.513 down €2.75 on yesterday’s Fixing. Ahead of New York’s opening gold stood at $1,312.40 and in the euro at €959.74, while the dollar stayed at recent lows.

Silver Today – Silver also rose very little in Asia opening around $22.10 in London. Ahead of New York’s opening it traded at $22.10.

Gold _{(very short-term)}

The gold price should continue to consolidate in New York, today.

Silver _{(very short-term)}

The silver price should continue to consolidate today, in New York.

Price Drivers

While the gold price remained in a tight consolidation mode yesterday U.S. sellers made quite an effort not to just sell their gold but to try to force the gold price down, once more. We know this because spreading sales over a period ensures maximum proceeds for the clients, but when we see 10 tonnes dumped in one shot on the market we see an attempt to break the back of the gold price, such as yesterday’s sales from the SPDR fund. There were sales of 10.507 tonnes from the SPDR gold ETF holdings on Monday leaving its holdings at 882.227 tonnes and sales from the holdings of the Gold Trust of 0.61 tonnes which left them at 172.54 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]

It appears that Indian demand is finding access to smuggled gold to the extent that the gold premium fell from $100 to $50. But we expect this premium level to fluctuate with the amount of gold provided by smugglers. The Indian government is trying to halt the import of gold as it is the second largest factor after oil in the import bill of the country, but India needs to improve its exports to resolve the Current Account Deficit. Until it does the pressure will remain on the Rupee. But it is a structural problem that won’t go away.

‘D-Day - 86’....................We find extraordinary the way market moods are changing in the U.S. towards eventual tapering. The Fed’s intention when it first announced this was to give confidence to the markets that growth was sufficiently established for the tapering of stimuli. But fear set in, as interest rates threatened the housing market and economic growth. It also became obvious that the bond market would begin to meltdown with yields rising and foreigners halting purchases. With the recent political debacle undermining growth once more [and not for the last time?], if the U.S. is to influence the gold price short-term it will be to make it fall if U.S. growth subsides and to rise if U.S. economic growth picks up.

Silver – The silver price is holding its highs at above $22 waiting to see if gold will move higher.

Regards,

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