Silver Market Morning

Gold Today –The gold price in New York rose to $1,240.70 then fell to $1,230.70 on Tuesday. On Wednesday Asia took the gold price to $1,235, before London let it slip slightly to $1,232 ahead of the Fix, which was set at $1,233.25. In the euro it Fixed at €896.974. Ahead of New York’s opening the dollar was steady at $1.3748: €1 with gold, ahead of the opening in New York, at $1,231.80 and in the euro at €895.59.

Silver Today – Silver was lifted slightly to $19.96 up 26 cents on Monday then pulled back to $19.90 on Tuesday in New York. Ahead of New York’s opening, it traded at $19.96.

Gold _{(very short-term)}

The gold price will wait for the Fed’s announcement before moving strongly in New York.

Silver _{(very short-term)}

The silver price will wait for the Fed’s announcement before moving strongly in New York.

Price Drivers

So long as it’s not called deflation. Disinflation sounds tame. But for the first time we are reading these words on a pro-U.S. and optimistic site. The positive ‘spin’ that growth and inflation will rise is now changing to ‘moderate growth but with ‘disinflation’. Will it suffocate growth? If so that implies that quantitative easing has not worked! This adds to the importance of the Fed’s words today. To give a balanced perspective, the Fed’s announcement today is going to heavily affect most financial markets and not just in the States! We believe they cannot afford to taper, yet!

In the last two days there were 8.70 tonnes sold from the SPDR gold ETF then another 2.085 tonnes sold yesterday and from the Gold Trust 0.45 of a tonne sold yesterday. This left the SPDR gold ETF holdings at 816.819 tonnes and the Gold Trust holdings at 166.81 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] The large sale on Monday only pulled a strongly rising gold price from $1,250 back to $1,241. We would have thought that such sales would have damaged the gold price more severely, but it didn’t. We again emphasize that sales from gold ETFs are happening only in the U.S., nowhere else. With ‘tapering’ about to happen we would have expected more such sales.

And that’s why we can be sure that the announcement from the Fed will dictate the very short-term direction of the gold price. If there is no ‘tapering ‘ announcement the short position on COMEX will, to a large extent be covered by speculators. It is huge, so we would expect short covering to tell us what will happen in the physical market too.

Consequently, the gold price is at a critical point with strong support and strong overhead resistance. No place for widows and orphans. Subscribers should note that the risk levels in the gold and silver markets are much higher than they have been for some time. The gold market’s focus is very sharp on the announcement from the Fed today. The Technical position is clear on this.

Silver – The silver price sees heightened risks today ahead of a strong move.

Regards,

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