Silver Market Morning

Gold Today –Gold closed stronger at $1,344.60 down $8.40 in New York on Tuesday. Asia lifted it $2 and London lifted close to $1,350 ahead of the Fix, where it was set at $1,349.50 up $2.50 over yesterday’s Fix. In the euro it Fixed at €980.813 up €2.0 over yesterday’s Fixing as the dollar vacillated. Ahead of New York’s opening gold stood at $1,350.20 and in the euro at €981.11, while the dollar stood at $1.3762: €1.

Silver Today – Silver rose to $22.48 up 1 cent in New York. Ahead of New York’s opening it traded at $22.72.

Gold _{(very short-term)}

The gold price should show a mixed bias, subject to the Fedspeak in New York, today.

Silver _{(very short-term)}

The silver price should show a mixed bias, subject to the Fedspeak today, in New York.

Price Drivers

Once again there were no sales yesterday from the SPDR gold ETF or the Gold Trust holdings on Tuesday leaving their holdings at 872.020 tonnes and 171.88 tonnes once more. Yesterday at London’s opening a heavy sale took place that knocked the gold price back $10, from which the price is taking a day to recover. This is a case of traders trying to increase volatility in a market whose underlying current is now flowing not ebbing. But today should see volumes increase in the U.S. subject to the Fed’s announcement.

‘D-Day - 78’.................... Today sees the announcement from the Fed as they complete their 2-day meeting. It appears that the market is discounting interest rates staying on hold and ‘tapering’ postponed. Again we say most expect the words, ‘until next year’ but we would be very surprised if any date were specified. Such a result would remain gold positive.

Gold was virtually static in thin trade, yesterday with dealers moving the price in line with the moves of the euro against the dollar, once more. It is a ‘wait and see’ day until the Fed speaks from on high [Capitol Hill].

As we forecast, premiums are at close to zero in China over the gold price as other non-banking importers are allowed to by-pass the banks and import gold directly. This is removing the delays that caused the premiums to rise in the first place. We would be surprised to see heavy premiums on the gold price in Shanghai again. [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]

Over in India with Diwali starting next week, premiums on the gold price are extremely high because of the government’s blocking of gold imports. They have been as high as $120 but now stand at $60 to $70 at the moment. We believe this is due to an influx of smuggled gold lowering the internal shortage of gold. Again we repeat, that if the government’s grip on gold imports were loosened, we have no doubt gold would be moving much higher, globally.

Silver – The silver price is again marking time waiting for gold to move strongly.

Regards,

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