Silver Market Morning

Gold Today –Gold closed slightly weaker at $1,323.50 down $19.30 in New York on Thursday. Asia held it at that level before London took it down to as the euro weakened further and the dollar rose with dealers following these in thin trade. It Fixed at $1,314.75 down another $19.00 over yesterday’s Fix. In the euro it Fixed at €971.729 down only €4.0 over yesterday’s Fixing. Ahead of New York’s opening gold stood at $1,323.30 and in the euro at €974.34, while the dollar stood at $1.3581: €1.

Silver Today – Silver rose to $21.88 down 80 cents in New York. Ahead of New York’s opening it traded at $22.93.

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

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. Friday is a day favoured by U.S. gold sellers to try to press the gold price down. We do not expect them to be able to have the same impact today as the gold price approaches $1,300.

‘D-Day - 76’.................... of the U.S. ‘Debt Ceiling’ crisis sees the subject out of the world’s spotlight. We expect this to remain the case until there is political mileage to be gained from it again.

The Eurozone is happy to see the euro weakening as this lowers the chances of tipping the Eurozone into deflation. The rise in GDP of 0.1% last quarter is less than fragile. With inflation at such a low level, deflation is a real threat, that’s why many expect a lowering of rates shortly. We do expect some extra stimuli from the E.C.B. soon, because if deflation does take hold it is considerably harder to control than inflation. [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 we mentioned yesterday, the pressure on the euro is to strengthen, not weaken, at the moment, but with swaps available to manage exchange rates, clearly the E.C.B. prefers a weaker euro.

With premiums on one ounce of gold in India rising to $130 now, ahead of next week’s Diwali festival, government intransigence on the regulations that caused it, is costing them votes. This is not just a festival to be enjoyed it has religious and family significance for Indians and their families.

This week has seen thinner than usual Chinese demand. Current lower prices should attract Chinese buyers back again.

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

Regards,

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