Silver Market Morning

Gold Today –Gold closed slightly weaker at $1,283.50 down $3.90 in New York on Monday. Asia let it slip, as did London, down to $1,378 ahead of the Fix where it was set at $1,381.00 in London, down $2.74 on Monday’s Fixing. In the euro it Fixed at €956.898 down €0.8 on Monday’s Fixing. Ahead of New York’s opening the euro strengthened to $1.3398: €1 with gold at $1,281.30 and in the euro at €956.37.

Silver Today – Silver rose to $21.36 down 9 cents in New York on Monday. Ahead of New York’s opening it traded at $21.18.

Gold _{(very short-term)}

The gold price will still look for a floor in New York, today.

Silver _{(very short-term)}

The silver price will still look for a floor in New York, today.

Price Drivers

The SPDR gold ETF again saw no sales or purchases on Friday or in the Gold Trust holdings, leaving their holdings at 868.418 tonnes and 172.21 tonnes. The current slight fall appears to be caused by dealers looking for direction and trying to tempt buyers. However, it is a good point for bears to try to break support. Again, we expect markets to become volatile once either buyers or sellers decide to act. But at the moment it is almost frozen, knowing that when this point of balance is achieved a strong move either way is about to take place. With the market being so thin, the move is likely to be more than usual.

We note that demand from China remains vibrant so the underlying support is strong. The conflict between short-term waves and the underlying current will resolve itself soon as it always does. But for sure there are interests out there that are not keen for the gold price to rise, it seems, or the move would have happened long before now. With China walking its own road not subject to the influence of the U.S. we are seeing an entirely different picture to the one we have seen since 1968, where despite the underlying disturbance in currency markets, the U.S. was able to rein in forces that were not happy to be dominated by the U.S. but did not have the economic power to oppose it. Today, China’s power is growing separately and competitively against the U.S. In time it will force the U.S. to release its firm grip on the currency world and accept a multi-reserve currency system. The turbulence the currency world saw that benefitted gold from 1968 onwards will be tiny compared to what lies ahead when the dollar hegemony is ruptured by the Yuan. There is little the current monetary system can do to prevent such a rupture. [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] While we have had an announcement from China that increases its convertibility, we expect more such announcements to be made shortly. The internationalization of the Yuan is happening faster than most expected.

Silver – The silver price has pulled back faster than expected so now could become volatile to the upside if a rise happens soon.

Regards,

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