Silver Market Morning

Gold Today –Gold closed slightly weaker at $1,342.80 down $1.80 in New York on Wednesday. Asia initially let it slip slightly with dealers following the euro against the dollar in thin trade, but before London opened Asia let it slide to $1,334. London held it around there until the Fix, where it was set at $1,333.75 down $15.75 over yesterday’s Fix. In the euro it Fixed at €975.819 down only €5.0 over yesterday’s Fixing as the dollar strengthened. Ahead of New York’s opening gold stood at $1,332.60 and in the euro at €977.19, while the dollar stood at $1.3637: €1.

Silver Today – Silver rose to $22.68 up 20 cent after touching over $23 in New York. Ahead of New York’s opening it traded at $22.25.

Gold _{(very short-term)}

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

Silver _{(very short-term)}

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

Price Drivers

The announcements from the Fed was as we expected, to continue the bond buying program at current levels and to make no ‘tapering’ moves until employment was ‘significantly higher’. There is always a danger of reading too much into too little and we now see the media already taking the failure to refer to ‘tight market conditions’ as an implication that tapering could happen in December. We take the Fed’s statement to mean what it says. However, what impact on gold will this have? At the moment the gold price is only reacting to moves in the euro against the dollar as dealers move prices inversely with the dollar in thin trade from China. This is not a reaction to the Fed’s statement. The Fed’s statement, to us, is neutral to the gold price. The rest of the year could well see the slowing and halting of sales from the SPDR gold ETF and other U.S. based gold ETFs. It is significant that 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. It is clear that sales of gold from the U.S. are dropped onto the market in a manner that attempts to lower the gold price. This is not succeeding except for short periods, after which the gold price recovers, leaving the market ‘mixed’

‘D-Day - 77’.................... Happily, the battle between Democrats and Republicans over the debt ceiling is not headlines, at the moment. But that does not imply we are nearing a resolution of the problem. There has been a marked lowering of confidence in the U.S. and the dollar, not only over the last five years, but in 2013 in particular. By extension this impacts the credibility of the global currency system. [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]

In the Eurozone the banks may pull back assets to itself from outside the zone due to regulatory moves. This will support the euro and gold dealers will reflect such changes in the $: € exchange rate. But Asian demand remains the main support for gold, currently.

Silver – The silver price was vigorous yesterday, but ended only slightly changed.

Regards,

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