Silver Market Morning

Gold Today –The gold price in New York fell to the $1,240 level with Asia holding it there overnight. London did the same right up to the Fix where it was set at $1,241.75 down $9. In the euro it Fixed at €913.119 down €6.685. Ahead of New York’s opening the euro stood at $1.3596: €1 with gold at $1,241.40 and in the euro at €913.14.

Silver Today – Silver pulled back to $19.70 down 28 cents on yesterday’s close in New York. Ahead of New York’s opening, it traded at $19.70.

Gold _{(very short-term)}

The gold price should continue to consolidate in New York, today.

Silver _{(very short-term)}

The silver price should continue to consolidate in New York, today.

Price Drivers

While the dollar is weakening against both the euro and sterling today still around $1.3600: €1 the gold price fell back again after sellers from the SPDR sold 5.702 tonnes but no sales came from the Gold Trust. This left their holdings at 843.206 tonnes and 169.97 tonnes, respectively. This was sufficient to cause an easing in the gold price of $10. This was not a large decline in view of the Technical picture still pointing downwards. It is difficult to state whether the support seen in the market is sufficient to change the Technical picture at the moment. But if the support was not as strong as it is, we would have expected a greater fall.

Economic growth remains fragile in the U.S. and barely exists in the Eurozone. Low interest rates are causing property prices to rise still, but sustainable growth needs far more than this. Any sign of rising interest rates will threaten this growth. Equity markets are breaking new high ground, but again, rising interest rates could halt this in its tracks.

In the emerging world, countries not under the direct influence of China are also fearful of rising rates. They face a probable exodus of foreign investments on a large scale, if interest rates rise, particularly in those nations with current account deficits. This will hammer their exchange rates, breeding inflation as we see now in India. On the back of a deflationary mood in the global economy, such inflation will exacerbate the decline in economic growth. Where will gold go to? [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]

Silver – The silver price since 2008 in particular has shown itself to be a monetary metal [a counter to currencies] as well as a sound investment. The growth of this facet of silver has been remarkable since 2005, when the investment side of silver was nearly zero. We expect silver investment to continue to grow right across the world, both the developed and emerging, for the foreseeable future. The economic picture we paint above will accelerate such investment demand both for silver and gold. [See articles on www.SilverForecaster.com

Regards,

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