Silver Market Morning

Gold Today –Last night and in Asia, the gold price rose, despite its pointing down on the charts. It was at $1,253 in Asia ahead of London’s opening ahead of the Fix where it was set at $1,250.75 up $19. In the euro it Fixed at €923.881 up 11.924 reversing yesterday’s fall. Ahead of New York’s opening the euro stood at $1.3512: €1 with gold at $1,252.55 and in the euro at €924.35.

Silver Today – Silver rose to $20.12 up 25 cents on yesterday’s close in New York. Ahead of New York’s opening, it traded at $20.13.

Gold _{(very short-term)}

The gold price should have a slightly stronger bias in New York, today.

Silver _{(very short-term)}

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

Price Drivers

The negative Technical picture still dominates in the U.S. as the dollar at first strengthened then weakened today to $1.3542 in London against the euro. This is still encouraging sellers from the SPDR and Gold Trust gold ETFs. The SPDR gold ETF saw 3.301 tonnes of gold sold yesterday and o.33 of a tonne sold from the Gold Trust, leaving their holdings at 848.908 tonnes and 169.97 tonnes respectively. Again, in the absence of Indian demand these sales are having a disproportionate effect on the gold and silver prices. It is clear that the technical picture is deterring buyers at the moment who expect more falls in these prices after this current correction.[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]

A new issue has arisen in the gold market! After the banking scandals starting in 2008 and continuing non-stop until now we are no longer surprised when we see a new one emerge. After the LIBOR scandal, the Foreign Exchange rate scandal is being investigated and turpitude reigns. But now, for some reason, we are shocked to see it spill into the ‘insider trading’ around the Gold Fixing. It appears that details of the prices being contemplated in the Fixing were being leaked to the Futures and Options market allowing traders to take positions briefly that allowed them to make good profits at the announcement of the Fixing price. With five banks handling the Fix in what is an open, and fair system reflecting a balance of demand and supply at that moment in time, such ‘trading’ sours their integrity, if proved accurate. We can only hope that the investigation is handled quickly. It is a difficult one, because the system does disclose prices being contemplated at the Fixing, before the fix, to get that true balance, so any client linked to the dealers has enough information to trade in other gold markets. It may not be the bankers this time?

However, the potential for a conflict of interest within these banks is huge as each bank is permitted to deal for its own account as well as those of clients.

Silver – The silver price continues to follow gold almost as the long shadow of gold, rising faster and falling further than gold short-term. We cannot see this changing in the future because of the monetary aspect of silver and the nature of silver investors.

Regards,

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