Silver Market Morning

Gold Today –Gold closed stronger at $1,340.20 in New York yesterday. Asia let it slip slightly by $5 and London took it $2 lower to Fix at $1,333.00 up $21.25 on yesterday’s Fix. In the euro it Fixed at €968.68 up €9.16 on yesterday’s Fixing. Ahead of New York’s opening gold stood at $1,332.1 and in the euro at €968.69, while the dollar fell further to $1.3754: €1.

Silver Today – Silver rose to $22.68 in New York. Ahead of New York’s opening it traded at $22.58.

Gold _{(very short-term)}

The gold price should show a stronger bias in New York, today.

Silver _{(very short-term)}

The silver price should show a stronger bias today, in New York.

Price Drivers

While the gold price jumped $25 yesterday U.S. sellers continued in their efforts try to force the gold price down. There were sales of 3.90 tonnes yesterday on top of Monday’s 10.507 tonnes from the SPDR gold ETF holdings leaving its holdings at 878.324 tonnes and no sales from the holdings of the Gold Trust which left them, again, at 172.54 tonnes. It is very significant that institutional sales of gold in such large quantities this week are having no impact on the gold price, which is robust, despite their efforts. We have been waiting for these sales to fall away as they were holding back the gold price, but with the break in overhead resistance, short covering and Asian demand are now overwhelming such supply rendering them ineffective against this price rise, at the moment. [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]

As an example of the erratic smuggled gold supply, premiums in India on an ounce of gold jumped to $140, as Diwali approaches and demand soars. This makes the Indian middle classes very unhappy and it is this social group from which the government derives its support base. In the light of this, we expect there to be a day in the not too distant future, when there will be an easing of the blocks government has put on gold imports. We believe the government’s contemplation of a deposit scheme for gold to be held in the banks, to supply internal demand to be a non-starter. It is more likely to be a scheme for the government to access gold as a guarantee against future foreign loans.

‘D-Day - 85’....................The jobs report in the U.S. disappointed yesterday and reinforced the prospect of a delay in tapering of QE. It even raised doubts over the quality of U.S. economic growth. But the net result was that the dollar slipped to a new recent low at $1.3770 against the euro.

In the Eurozone the media are asking if France is now the ‘sick man’ of Europe. How will such news from the U.S. and the Eurozone affect gold? It emphasizes that currency instability, assisted by low interest rates which will continue for the foreseeable future. Even the foreseeable future is a time period that is shortening now.

Silver – The silver price robust wanting to run, but tied to gold still.

Regards,

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