Silver Market Morning

Gold Today –The gold price in New York rose to $1,262.50 up $21.90 on Wednesday then Asia took it lower to $1,256 ahead of London’s opening. London held it around that level ahead of the Fix, which was set at $1,255.25 up $9.50. In the euro it Fixed at €912.047 up nearly €6.00. Ahead of New York’s opening the euro stood at $1.3773: €1 with gold at $1,244.00 and in the euro at €903.22.

Silver Today – Silver rose with gold to close at $20.40 up 53 cents in New York. Ahead of New York’s opening, it traded at $20.00.

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

There were 2.09 tonnes sold from the SPDR gold ETF but there were no sales from the Gold Trust yesterday. The SPDR gold ETF holdings now stand at 833.605 tonnes and the Gold Trust holdings at 167.90 tonnes. [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] This sale was made, it appears on the basis that the gold price was hitting overhead resistance. This now stands at the $1,260 level with support around $1,220.

Gold continues to look for direction and will do so until one of several events happen. One of these is the halting to sales from the SPDR and Gold Trust gold ETFs. While these sales are much lower than a month ago, the psychological impact they have on the market is negative because they are so visible and persuade traders and dealers to give the gold price a downside bias. In terms of the daily volume of gold entering China, SPDR and Gold Trust sales are far lower, so they should not impact the gold price at all.

Once these sales do terminate the impact of U.S. political events will have zero impact on the gold price as eyes turn eastward. As we have mentioned in our weekly newsletter, there are huge fundamental factors that will change the very shape of the gold market in 2014.

The dollar continues to weaken against the euro, sterling and other currencies and now stands at $1.3773 to one euro. We, again, see it continuing to fall.

One bit of news that removes potential drama from the financial markets of the world is the agreement in the U.S. on government spending cuts. While there is still no resolution on the Feb 7 debt ceiling issue, there is a growing feeling that this too will be resolved. This depends on the Tea Party and the control the Republican leadership can exert on them. At least the prospect of a U.S. credit rating downgrading appears to have been averted. For gold a peaceful resolution on these issues, we feel, will have no impact, but if Republican discord unsettles that peace, gold could benefit as a result of the weaker dollar.

Silver – The silver price has the potential to outpace gold’s rise soon.

Regards,

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