Silver Market Morning

Gold Today –The New York gold price rose strongly to $1,289.9 up $15.30 at the close on Tuesday. Asia saw it slip slightly to $1,285 ahead of London’s opening on Wednesday. London held it there before Fixing the gold price at $1,286.50 up $3.75. In the euro, it Fixed at €942.836 up €4.742, while the dollar stood at $1.3645, slightly stronger. Ahead of the opening in New York gold stood at $1,287.00 and in the euro at €943.76.

Silver Today –The silver price closed up at $20.20 up 15 cents in New York. Ahead of New York’s opening, it was trading at $20.20.

Gold _{(very short-term)}

Gold will gather itself before attacking $1,300 today, in New York.

Silver _{(very short-term)}

Silver will move in tandem with gold today, in New York.

Price Drivers

Friday saw a purchase of gold of 1.799 tonnes into the holdings of the SPDR gold ETF [GLD] but none into the Gold Trust gold ETF leaving their respective holdings at 798.852 tonnes and 163.18 tonnes. After New York opened, non-physical selling pushed the price of gold back to $1,279 from $1,286. The testimony from Janet Yellen, the new head of the Fed and the stronger dollar were influences that encouraged the fall. But because of the selling’s lack of substance the gold price recovered strongly to close at $1,289.90.

In the future, we may well see the influence of dollar moves over the gold price retreat, in favor of the Yuan. After all, the Chinese pay Yuan for their gold. With U.S. gold selling ceasing, the U.S. influence over the gold price will become increasingly short-trm and lack real depth. [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]

New York saw short covering as well in addition to physical demand yesterday. We expect this to be an ongoing feature of demand for a few more days at least.

The Trade deficit of India is falling slightly now as the Rupee shows a much greater degree of stability in the last few weeks and the strangulation of gold and silver imports continues. India’s trade deficit narrowed to US$9.92 billion in January from $10.15 billion in December, according to the country’s Trade ministry. The Trade Ministry has recommended an easing of the duties and restrictions on the precious metals. The ministry said that the combination of a 77% drop in the import of gold and silver and an increase in exports helped improve the outlook for the country’s current account balance. More to the point, the drop in the deficit caused by the restraining of their import is not so large as to warrant such a politically negative factor for the government, just over three months ahead of the elections. More efforts need to be made in other areas of exports and imports for the Trade deficit to fall convincingly. It is growing more likely that the government will act before the end of March to ease restrictions on these imports.

Silver – The silver price continues to move in tandem with gold.

Regards,

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