Silver Market Morning

Gold Today –Gold closed slightly weaker at $1,314.80 down $8.70 in New York on Friday. Asia held it at that level as did London as the euro weakened further and the dollar rose. But now gold is holding steady in the dollar. It Fixed at $1,314.25 down $0.50 over Friday’s Fix. In the euro it Fixed at €972.942 up €1.20 over Friday’s Fixing. Ahead of New York’s opening the dollar weakened to $1.3508: €1 with gold at $1,317.75 and in the euro at €975.53.

Silver Today – Silver rose to $21.84 down 4 cents in New York. Ahead of New York’s opening it traded at $21.87.

Gold _{(very short-term)}

The gold price should be steady to showing a stronger bias, again, in New York, today.

Silver _{(very short-term)}

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

Price Drivers

There were sales of 5.703 tonnes on Friday from the SPDR gold ETF and 0.30 tonnes from the Gold Trust holdings and leaving their holdings at 866.317 tonnes and 171.58 tonnes. As we said on Friday, Friday was favoured by U.S. gold sellers, to try to press the gold price down and they did. And we also forecast that they would not be able to have the same impact then the gold price approached $1,300. The price did move back from $1,323 but as you see in the euro, it is having no impact as the price rose slightly in that currency. Most of last week saw gold move only slightly in the euro with all the movement coming in dollar terms as the euro fell and the dollar strengthened. So in the euro, last week the price was little changed.

As more and more gold by-passes the ‘open’ markets in London and New York, we will see those markets and the price set in them, fail to reflect true demand and supply balances. What gold is by-passing markets?

In China their entire 430 – 440 tonnes of annual supply, remains in the country. Countries like Kazakhstan retain their gold production for their reserves as does Russia [230 tonnes]. More and more gold mines that are being bought by the Chinese are moving their gold directly to China and likely not through Hong Kong, so avoiding being recorded. This supply off-take lowers the volume of gold that reaches the open market. So we don’t have to see rising demand to see prices rise. We have long stated that this would be an increasing trend among the emerging world central banks in gold-producing nations. [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]

‘D-Day - 73’.................... We keep this countdown to the next U.S. debt-ceiling crisis, as a highlighter of the way politicians use such crises to their own advantage, irrespective of the damage they do. As the countdown lowers, so the external economic impact rises. This is a negative factor for the dollar and is gold positive!

Silver – The silver price will likely be steady this week as it builds strength above support.

Regards,

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