Silver Market Morning

Gold Today –The New York gold price was slightly lower at $1,254.70 down $3.10 at the close on Tuesday. Asia held it there ahead of London’s opening. London set the gold price at $1,257.00, $4.00 up on Tuesday. In the euro, it Fixed at €930.353 up €3.166 while the dollar stood at $1.3511 barely changed. Ahead of the opening in New York gold stood at $1,257.35 and in the euro at €930.54.

Silver Today –The silver price closed up at $19.49 up 14 cents in New York. Ahead of New York’s opening, it was trading at $19.63.

Gold _{(very short-term)}

Gold will trade in a tight range ahead of a strong move this week or next, in New York.

Silver _{(very short-term)}

Silver will trade in a tight range ahead of a strong move this week or next, in New York.

Price Drivers

Monday saw purchases of 3.898 tonnes of gold yesterday into the SPDR gold ETF [GLD] but none into the Gold Trust gold ETF leaving their respective holdings at 797.053 tonnes and 161.86 tonnes. While the gold price slipped slightly these purchases would have helped prevent further falls. This is remarkable because of the absence of the bulk of Asian demand until next week. We are moving to the end of the third week where U.S. based gold ETF sales have either halted or turned to purchases of physical gold. Another week of this and it will confirm that such sales have stopped. More importantly a significant source of supply will have ended completely.

As we said earlier in the week the gold and silver prices should be plummeting right now, but instead supply and demand have come into a tight balance. The next move has to be a strong move either way. So when Asian demand returns…….[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]

Treasury Secretary’s warning of the threat of a U.S. default if the ‘debt ceiling is not raised’ is no longer newsworthy. We looked through Bloomberg’s website and found no mention of it today. Is this because it is a journalist’s decision not to feature it or because without a shadow of doubt the ceiling will be raised? After the partisan battle in government that hurt the U.S. economy with a shutdown we are puzzled at its treatment. After all, if a U.S. default happens alongside a credit downgrade, the dollar will be hurt. This would unsettle global currency markets and impact gold and silver prices.

All in all, this week looks like it is the ‘quiet before the storm’! So many potentially dramatic events could impact gold and silver prices next week that the tight trading range of gold portends a strong move next week. We know where we expect it to go. Do you?

Silver – The silver price is telling us it is positive short-term, as well as pointing to where it thinks gold is going to go.

Regards,

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