Silver Market Morning

Gold Today –On Tuesday the gold price in New York fell to close at $1,243.40 with Asia taking it $3 lower. The dollar is slightly stronger at $1.3639: €1 ahead of London’s opening. In London the gold price was Fixed at $1,238.00 down $10.75 on yesterday. In the euro it, Fixed at €908.557 down €4.54. Ahead of the opening in New York gold stood at $1,238.15 and in the euro at €909.07. The dollar stood at $1.3622: €1

Silver Today –The silver price slipped slightly to $20.19 down 26 cents in New York yesterday and again in Asian trade to $20.15 before London’s opening. Ahead of New York’s opening, it was trading at $20.07.

Gold _{(very short-term)}

The gold price should have a neutral to slightly weaker bias today, in New York.

Silver _{(very short-term)}

The silver price should have a neutral to slightly weaker bias today, in New York.

Price Drivers

Yesterday saw sales from the SPDR gold ETF of 3.565 tonnes but the Gold Trust gold ETF saw no sales leaving their respective holdings at 789.556 and 161.83 tonnes respectively. This demonstrates the point we made yesterday on the influence of the SPDR gold ETF on the gold price. Clearly, more work needs to be done on breaking down overhead resistance. That fight still continues because the gold price has not fallen back far as it would have done had support been weaker. As we said yesterday too, if it breaks above $1,260 - $1,270 then we expect the bulk of resistance to have fallen, a very positive signal for the gold price. Again we are watching the SPDR gold ETF closely.

An important point gold investors should consider is the perception favored in the U.S. that economic growth is counter to the gold price and positive for the U.S. dollar. The World Bank has issued positive forecasts for global growth for most nations. In the U.S. growth of 3.2% is forecast against 2% last year. Many institutional fund managers see this as reason to forecast a fall in the gold price to $1,000. Certainly, this is the driver inside the U.S., where institutions dominate markets.

But history shows that the gold price expresses a consensus on the risks facing the global monetary system and confidence in currencies. Growth has not removed these risks in the past, as we saw in 2007 when U.S. growth was at its strongest alongside record gold prices. What has changed since then has not been a growth in currency confidence at all. Quite the reverse, currency fears are growing by the day, because of structural faults in the system irrespective of economic growth.

The divergence of these two views will happen in the near future and the fundamentals will show themselves in the gold price at that time. [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]

Silver – The silver price continues to consolidate with a longer term upward bias.

Regards,

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