Silver Market Morning

Gold Today – The gold price closed at $1,317.80 down $0.20 on Friday, in New York. Asia lifted it to $1,328.40 ahead of London’s opening. London then pulled the price down to $1,324 as the dollar showed a little strength. The gold price was Fixed in London at $1,324.50 up $7.25. In the euro, it Fixed at €958.047 up €9.43 as the euro was weaker at $1.3825 down from $1.3886: €1. Ahead of the opening in New York gold stood at $1,324.20 and in the euro at €957.90.

Silver Today – The silver price closed at $19.95 down 10 cents on Friday’s close, in New York. Ahead of New York’s opening, it was trading higher at $19.89.

Gold _{(very short-term)}

We expect the gold price to consolidate again but with a positive bias, today in New York.

Silver _{(very short-term)}

We expect the silver price to consolidate and follow gold, today in New York.

Price Drivers

Gold and silver prices are consolidating strongly in Asia but being dragged down by London and New York. London is of course where producers sell gold they have over and above the amounts they have contracted on outside the market. Asia has to import gold from London or contract directly with producers, outside the market. But it is clear that that extra marginal demand is pushing prices up there, subsequently to be seen in the London market, in particular.

Last Friday saw sales of 1.991 tonnes from the holdings of the SPDR gold ETF on Friday but none from the Gold Trust. Their respective holdings stand at 804.423 tonnes and 164.41 tonnes. While this left gold and silver lackluster on Friday, Asia started the week with a bang and lifted the gold price $8 before London even began to stir.

But the dollar tried to go stronger as Mario Draghi head of the E.C.B. emphasized heavily that a strong euro was against the interests of lifting inflation in the E.U. Consequently, we expect more statements on the subject ahead of the institution of quantitative easing, shortly. ‘Forward guidance’ is fast failing and must be replaced by action. We talked about this in our latest newsletter as this is a campaign to directly weaken the euro. We remember that the G-8 nations agreed that policies would not be used to directly influence exchange rates. That agreement is fast fading into oblivion as the interests of those who made that agreement have changed. And this may not affect gold in the way traditional traders are used to. They see gold falling with a stronger dollar on a short-term basis. But the reasons behind any fall in the euro have a distress element, which is positive for gold. What is even more alarming is that inflation at 2% is going to translate into growth. However, price rises don’t mean an economy is growing. It is actual job and manufacturing growth that describes growth. But maybe this is enough to fool consumers, or is it? Certainly it reinforces the case for gold.

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Silver – The silver price remains robust.

Regards,

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