Silver Market Morning

Gold Today – The New York gold price closed at $1,292.50 down $8.50 on Thursday in New York. All the falls in the last week have happened in New York, but on thin trade. Asia lifted it to $1,296. London then held it at $1,295 at the opening. The gold price was Fixed in London at $1,295.75 up $0.75. In the euro, it Fixed at €944.149 up €2.057 as the dollar stood at $1.3724 up from $1.3846: €1. Ahead of the opening in New York gold stood at $1,295.40 and in the euro at €943.07.

Silver Today – The silver price closed at $19.75 the same as yesterday in New York. Ahead of New York’s opening, it was trading at $19.74.

Gold _{(very short-term)}

We expect the gold price look for a bottom again, then consolidate, in New York.

Silver _{(very short-term)}

We expect the silver price look for a bottom and then consolidate, in New York.

Price Drivers

In continuing very thin physical trade in global gold markets gold prices were pulled back ahead of the ‘roll over’ and closing of options on COMEX. New York is entirely responsible for pulling prices down. As we said yesterday this process will continue until we enter the new month. We expect buyers to see below $1,300 as being a good entry point, more likely next week.

While the premium on gold prices in China has evaporated we do not believe that this has caused demand to soften. The issuing of new licenses to more banks will create a more competitive environment on the Shanghai Gold Exchange, removing premiums as liquidity increases. Reports for the year’s imports to date, through Hong Kong, point to growing Chinese demand. But we must point out that this does not include March’s numbers. We should also point out that Hong Kong is not the only port of entry for gold. This is clear when one examines the physical deliveries from the Shanghai Gold Exchange. As a result, import numbers of tonnes imported to Hong Kong understate total gold imports to China.

Monday see the publication of the Indian Budget to their Parliament and is the day when the Finance Minister reports on the review of the gold import restrictions. As we watch the strengthening of the Rupee over the last few weeks it is becoming clear that either the Current Account Deficit in India is falling or the central bank is managing the exchange rate well, or both. It was the state of the Current Account Deficit that was to be the deciding point on a change in gold import restrictions, so we are expecting a positive announcement on this front on Monday. If removed entirely, we would expect an additional 5oo tonnes of demand to be unleashed onto global physical markets. [For more on this, subscribe to www.GoldForecaster.com and www.SilverForecaster.com and visit www.StockbridgeMgMt.com to hold gold out of reach of potential confiscation]

We saw no change in the holdings of the SPDR gold ETF or the Gold Trust. Their respective holdings remain at 816.972 tonnes and 166.14 tonnes.

Silver – The silver price riveted to the gold price.

Regards,

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