Silver Market Morning

Gold Today – The gold price closed at $1,326.70 up $8.90 Monday, in New York. Asia pulled it down to $1,311 ahead of London’s opening. The gold price was then Fixed in London at $1,311.50 down $13.00, because of the weaker euro. In the euro, it Fixed at €950.431 down €7.616 as the euro was weaker at $1.3800 down from $1.3825: €1. Ahead of the opening in New York gold stood at $1,308.00 and in the euro at €947.65.

Silver Today – The silver price closed at $19.99 up 4 cents on Monday’s close, in New York. Ahead of New York’s opening, it was trading higher at $19.85.

Gold _{(very short-term)}

We expect the gold price to consolidate again, today in New York in line with euro moves.

Silver _{(very short-term)}

We expect the silver price to consolidate, stronger than gold, today in New York.

Price Drivers

After Mario Draghi’s confirming that he wants to see a weaker euro, the market has obliged by pulling it back from its recent peak just under $1.40: €1 to $1.38: €1. If gold is moved in the same way as gold, we come to $1,307. This is where the gold price is now. We did not see selling of gold to press the gold price down, but dealer’s adjustment of prices in line with the dollar’s strength. Like the waves on the seashore the gold price fell but we believe this will bring in Asian buyers allowing the gold price to move higher after the current consolidation is complete.

Yesterday saw purchases of 1.798 tonnes into the holdings of the SPDR gold ETF, but none from the Gold Trust. Their respective holdings stand at 804.423 tonnes and 164.41 tonnes. This left New York closing at a high, but then the euro started to fall and in a knee-jerk reaction dealers, arbitrageurs and speculators pulled the gold price down in Asia but on little real selling. We do expect Asian buyers to see price falls as an opportunity to buy, not to sell. We see the undercurrent of robust gold demand easily capable of overwhelming these professionals. [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]

As statistics from the World Gold Council confirm the views we have held for several years now; that Asian demand and in particular, Chinese demand will overwhelm developed world demand and keep growing irrespective of the price, but in line with the growth of the Chinese middle classes, we see their important report as being virtually ignored by the gold market. China is developing the skills and infrastructure needed to dominate and control the gold market itself now, to back up the dominant demand it has for gold.

Silver – The silver price remains robust and did not want to fall much when gold did. We see silver remaining stalwart.

Regards,

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