Silver Market Morning

Gold Today –The gold price in New York dropped to $1,237.50 but was lifted to $1,242 in Asia. London did the same right up to the Fix where it was set at $1,245.25 up $3.50. In the euro it Fixed at €915.228 up €1.11. Ahead of New York’s opening the euro stood at $1.3610: €1 with gold at $1,247.40 and in the euro at €916.53.

Silver Today – The silver price was lifted by 5 cents to $19.75 on yesterday’s close in New York. Ahead of New York’s opening, it traded at $19.92.

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

The dollar continues to weaken against both the euro and sterling today now at $1.3610: €1. The gold price yesterday consolidated with barely any movement. There were no sellers from the SPDR gold ETF and none from the Gold Trust. This left their holdings at 843.206 tonnes and 169.97 tonnes, respectively. Friday has become a day when there are movements, but with the U.S. enjoying a Thanksgiving weekend, the gold market in the U.S. may well be quiet. However, such a quiet market is vulnerable to large sellers or buyers and likely to move prices strongly if they come in. So while we expect gold and silver prices to continue to consolidate quietly, we could be surprised. [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]

Subscribers will note that the bulk of gold market commentary remains focussed on economic events in the U.S. and yet we have had a steady recognition of growing Chinese demand. A little spoken of, but major gold market event has been the blockading of Indian demand from reaching the global gold market, thoroughly distorting the demand/supply picture. This has painted a picture that U.S. events are the key to the gold price, which is far from accurate. This could mislead investors to the extent that should India allow an easing of this blockade, we will see a gold price event of note.

A major factor, also watched almost casually, is not simply the rise in the level of demand from China, but the sheer volume it now accounts for as a percentage of total demand relative to supply. This is why our eyes focus more on Asia than on the U.S.

Because of the riveting of the silver price to the gold price, such market distortions are impacting the silver price. So wherever the gold price goes, the silver price is sure to go.

Silver – Silver market fundamentals, as we mentioned yesterday, have changed significantly in the last five years. Many had expected the silver price to be extremely vulnerable to the departure of photography from the demand side of them, but now photography demand has fallen back to only 5% of silver demand and is not longer a threat to the silver price. For a number of reasons, the supply/demand picture for silver now shares many common denominators with those of gold. [See articles on www.SilverForecaster.com] We see this as confirming that the price of silver will continue to move with that of gold.

Regards,

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