Silver Market Morning

Gold Today –Gold closed slightly weaker at $1,310.80 down $0.60 in New York on Monday. Asia lifted it $3 before London took it higher ahead of the Fix to $1,318.65 after which it Fixed at $1,317.00 in London, up $2.75 over Tuesday’s Fixing. In the euro it Fixed at €975.050 up €3.7 over Tuesday’s Fixing. Ahead of New York’s opening the dollar weakened to $1.35.23: €1 with gold at $1,321.00 and in the euro at €976.82.

Silver Today – Silver rose to $21.68 up 6 cents in New York. Ahead of New York’s opening it traded at $22.02.

Gold _{(very short-term)}

The gold price could break out either way soon, today in New York, today.

Silver _{(very short-term)}

The silver price could break out either way soon, in New York, today.

Price Drivers

There were no sales from the SPDR gold ETF and 0.04 of a tonne from the Gold Trust holdings, yesterday, which left their holdings at 866.317 tonnes and 171.54 tonnes.

While New York closed $4 down yesterday, London reversed that quickly at the opening taking it up $8 before the Fix. Certainly the last three days saw a balancing of demand & supply from which we expect a strong move either way. [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]

Yesterday we said that, “With the fragmentation of the gold market [as we are describing in our current series on the gold market] the gold price is not reflecting the true balance of demand and supply. It is reflecting only the balance of the demand and supply that is routed through London and other developed world markets and their distribution systems. This no longer represents the entire gold market...” We would like to add to that statement that no matter what the bullion banks, gold distributors or professional speculators in the market do, they cannot overwhelm the underlying currents of demand and supply of gold. Eventually these will win out and reflect in the gold price.

In the seventies the U.S. central bank sold gold to try to knock it down, the I.M.F. followed suit. Then the campaign to accelerate the supply of gold and threats of central bank selling squashed the price of gold down to $275 by the end of the century. Controlled sales then allowed the gold price to hold around $300 until 2005. Once the euro was well established by 2009 all sales of gold by central banks ceased and buying by other central banks began. This is the situation today with gold four times higher than it was in 2005. Once the U.S. speculators cease selling and the Indian government stops interfering in their local demand for gold, the attempts to turn the current of gold demand/supply be unfettered and will move to a balanced price reflecting all the demand/supply factors for gold.

‘D-Day - 71’.................... Still no visible progress in the U.S. ‘debt ceiling’ discussions yet.

Silver – The silver price should outperform gold today!

Regards,

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