Silver Market Morning

Gold Today –Yesterday the gold price in New York fell again to the lower $1,220 area, but was being pulled higher to the $1,226 level in Asian trade. The dollar was strengthening and was at $1.3596: €1 ahead of London’s opening. In London the gold price was Fixed at $1,226.00 up 50 cents on yesterday. In the euro it Fixed at €900.610 down nearly €2.00. Ahead of the opening in New York gold stood at $1,227.50 and in the euro at €901.712. The dollar stood at $1.3613: €1

Silver Today –The silver price 18 cents lower at $19.59 down 28 cents on yesterday in New York. Ahead of New York’s opening, it was trading at $19.55.

Gold _{(very short-term)}

We expect the gold price to consolidate today, in New York.

Silver _{(very short-term)}

We expect the silver price to consolidate today, in New York.

Price Drivers

Yesterday saw sales from the SPDR gold ETF, whose holdings fell to 793.121 tonnes down from 794.621 tonnes. There were no sales from the Gold Trust gold ETF leaving their holdings at 161.83 tonnes still.

The gold price is being still looking for direction. With the mood of U.S. investors still favoring equities over gold it is clear that sales of gold in the U.S. have been critical in holding back the gold price. So while they persist, markets will find it easier to keep gold on the defensive. However, sales of physical gold are being more than matched by purchases elsewhere, creating a strange situation where small but influential sellers continue to have a disproportionate influence over the gold price.

Many investors in the U.S. believe that gold prices will fall to the $1,000 area. If the gold price is dependent on the U.S. market to the exclusion of Asia, this is a distinct possibility.

Unfortunately, one cannot ignore Asia and must factor that influence in, realistically. This changes the dynamics of the gold market completely.

This leaves a host of U.S. and developed world gold investors sitting on the sidelines waiting for lower prices. At $1,200, if the gold price does drop to $1,000 we are 20% from the bottom. If $1,100 is going to be the bottom, we are 10% from it. If as we have seen in the last few months $1,180 is the bottom we are 4% from the bottom. If what we have expressed in the pages of our publications is correct, we are on the brink of considerable changes in the monetary world pointing to a considerably higher price well into multiples of current prices. [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]

What is a fact of history is that the U.S. in particular, buys on the rise, en masse, whereas Asia has a pattern of buying on the fall in the gold price. Which is wiser?

History shows the long-term investor who trades only on a major trend corrections achieves the most profits.

Silver – The silver price shows no sign of moving independently of the gold price, despite different fundamentals. It is the monetary aspect of silver that dictates the price.

Regards,

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