Silver Market Morning

Gold Today –The gold price in New York rose $13.70 to $1,251.20 on Friday but slipped back below $1,240 ahead of London’s opening and held around $1,238 in London ahead of the Fix where it was set at $1,237.50 down 45.25 up $7.75. In the euro it Fixed at €913.082 down €2.146. Ahead of New York’s opening the euro stood at $1.3527: €1 with gold at $1,238.40 and in the euro at €915.50.

Silver Today – The silver price was lifted by 24cents to $19.99 on Friday’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, with a weaker bias, in New York, today.

Silver _{(very short-term)}

The silver price should continue to consolidate, with a weaker bias, in New York, today.

Price Drivers

The dollar strengthened by 50 cents in London’s morning to $1.3553 against the euro. This was taken as a reason to weaken the dollar in dealer’s hands ahead of New York’s opening after the Thanksgiving weekend. 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. Because of the Thanksgiving weekend trading was thin in New York. [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]

As we start December after what was supposed to be the busiest month of the year for the gold market the absence of Indian demand left it around 25% quieter than usual. But, because of Chinese and other Asian demand for physical gold, demand remained relatively solid. While Indian parents are dipping into their own gold stocks to supply the dowry that are traditionally given to the daughter when she gets married, they have the resources to buy that gold from the gold market later, if and when it becomes available. Therefore this represents pent-up demand, not lost demand, to the gold market. With smuggled gold coming into the market at a discount, the very large retail chains that supply gold and jewelry to the market are losing market share as well as turnover. Rather than go out of business we see them also selling smuggled gold, under the counter, too. Consequently, the Indian government is fighting a losing battle on the gold front and will eventually ease the gold import blockade before it does structural damage to the gold industry there. We would stress that Indians see government in a different light to that of the developed world and will act against its legislation if they feel they are prejudiced by it.

Silver – The Silver price moved down with gold during London’s morning. The supply/demand picture for silver now shares many common denominators with those of gold, but we have to recognise the growth of the medicinal use of silver as well as its use in electronic systems. This will continue to grow and over time, the two new demand facets will add to strong growth in investment demand [See articles on www.SilverForecaster.com].

Regards,

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