Silver Market Morning

Gold Today –Gold closed slightly weaker at $1,317.20 up $6.40 in New York on Wednesday. On Thursday it closed at $1,306.70 Asia lifted it $2, then London came in and took it higher. At the Fix it was set at $1,309.00 in London, down $8 over Wednesday’s Fixing. In the euro it Fixed at €975.119 up €0.307 over Wednesday’s Fixing. Ahead of New York’s opening the euro strengthened to $1.3419: €1 with gold at $1,309.50 and in the euro at €975.86.

Silver Today – Silver rose to $21.78 up 10 cents in New York on Wednesday and on Thursday at $21.60. Ahead of New York’s opening it traded at $21.69.

Gold _{(very short-term)}

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

Silver _{(very short-term)}

The silver price will follow gold so could break out either way soon, in New York.

Price Drivers

The SPDR gold ETF saw no sales or purchases yesterday but this followed Wednesday’s purchases of 2.101 tonnes into the SPDR gold ETF and sales of 0.54 of a tonne from the Gold Trust holdings, leaving their holdings at 868.418 tonnes and 171.00 tonnes.

Again, in thin trading the gold price was lifted higher by dealers raising prices in line with a stronger euro on Thursday, before the Fix, but then came the 0.25% interest rate cut in the E.C.B. which dropped the euro by 1.7% immediately. The fall has been contained with the euro recovering over $1.3419 today. But the gold price is being moved in line with currency moves still. The trading range of the gold price is very, very tight and has been for several days now. We are close to a strong move either way in the gold price. All the relevant indicators are telling us that the market is on the brink of some spectacular moves in the short-term. Friday is New York’s most active day for gold and the one on which sales from the SPDR gold ETF have taken place recently. [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] With Mr Sprott saying that the numbers from GFMS are wrong and understate demand, which one is actually right? Our latest article will discuss that!

The E.C.B. lowered interest rates by 0.25% to 0.25% in an attempt to drop the exchange rate of the euro and hopefully lift inflation from present levels to over 2%. Such low inflation is a signal that deflation is crouching at the door. Please note the last interest rate cut was designed to lift growth. It didn’t. This one is designed to lower the value of the euro and stimulate inflation [gold positive]. The extraordinary high levels of unemployment in the Eurozone overall and in particular the levels amongst the youth is a structural problem that points to social problems in the future. Deflation will accelerate the process.

France has had its credit rating cut, again, to AA with S & P saying that government policies will fail to spur growth and fix public finances. Not only is the overall E.U. economy not out of the woods yet, but the economic disparity between the growing north and shrinking south of the Eurozone tells us the Eurozone is still in crisis.

Silver – The silver price should outperform gold today!

Regards,

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