Silver Market Morning

Gold Today – The New York gold price closed at $1,283.30 down $9.40 on Monday, after a week where the $1,290 level was the consolidation point, in New York. Asia lifted the price $3 on Tuesday morning as the start of the new month began. London took it down to $1,293.50 at the opening. The gold price was Fixed in London at $1,286.50 down $7.50. In the euro, it Fixed at €932.449 down €7.412 as the dollar stood at $1.3797 down from $1.3777: €1. Ahead of the opening in New York gold stood at $1,288.00 and in the euro at €933.77.

Silver Today – The silver price closed at $19.76 down 3 cents on Monday’s close, in New York. Ahead of New York’s opening, it was trading at $19.88.

Gold _{(very short-term)}

We expect the gold price to consolidate with a stronger bias, in New York.

Silver _{(very short-term)}

We expect the silver price to consolidate with a stronger bias, in New York.

Price Drivers

New York held in the mid $1,290 area in New York last week until the major U.S. banks to pressured the price further down to the low $1,280’s. Today is the first day of the month and the gold price started to rise in Asia and then in London and appeared to be doing so ahead of New York’s opening. All immediate reasons for forcing the gold price down have disappeared. We expect to see the re-establishment of positions, a positive for the gold and silver prices. Both the technical position and the fundamental one remain strong.

It appears from weekend meetings that the ‘crisis’ in Ukraine will fizzle out. We did not see a large ‘Ukraine’ premium on the gold price so do not see any further falls due to this.

Add to this Janet Yellen almost backtracking on the timetable for rising interest rates, another gold positive.

The Indian Finance Minister has informed the world that he is consulting with India’s central bank on lifting restrictions on gold imports. We expected more, but at least he confirmed he is considering easing them. As we watch the strengthening of the Rupee up 13.55 from the low it is 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. 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]

On Monday we saw a sale of 3.896 tonnes from the holdings of the SPDR gold ETF and a sale of 0.94 of a tonne from the Gold Trust. Their respective holdings stand at 813.076 tonnes and 165.20 tonnes.

Silver – Silver investors on the Silver Trust have bought 47.84 tonnes of silver since last week while the silver price has been falling.

Regards,

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