Silver Market Morning

Gold Today – The gold price closed at $1,303.10 down $0.20 on Wednesday, in New York. At Asia’s closed it was pulled it down to $1,297 initially at which price London opened. The gold price was then Fixed in London at $1,301.50 up $2.50, because of the stronger euro. In the euro, it Fixed at €941.615 up €3.031 as the euro went stronger at $1.3822 up from $1.3840: €1. Ahead of the opening in New York gold stood at $1,298.50 and in the euro at €936.80 as the euro weakened again to $1.3861.

Silver Today – The silver price closed at $19.67 up 5 cents on Wednesday’s close, in New York. Ahead of New York’s opening, it was trading higher at $19.62.

Gold _{(very short-term)}

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

Silver _{(very short-term)}

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

Price Drivers

This week we have seen High Frequency action in the gold market, evidenced by a huge number of contracts sold at the opening on Tuesday, which halted trading briefly in New York. This pulled the gold price to the mid-$1,290’s. Attempts were made by these traders on the following day too but failed to hold gold prices below $1,300. In Asia, today, towards the close, prices suddenly dipped too. Ahead of the Fix and after it today gold prices were again pulled below $1,300 despite a Fixing that was higher than the market. It seems that even these traders can’t buck the trend. More importantly it helps us to understand such trading a bit better. We have often used the analogy of waves on the seashore for short-term moves in the gold price, which cannot overcome the tide. It would appear that High Frequency Trading is like a wave that goes much further out and comes in much more too. It shakes out weak holders who are responsible for longer term price moves, but of itself, does not cause any lasting impact. This is because such trades are closed on the tiniest of moves. Placed at the opening or closing of markets when markets are at their quietest and most reactive they cause the greatest panic, movement and profits. That’s why the gold price was forced down $32 before recovering. In the process it shook out 8.389 tonnes of gold from the holdings of the SPDR gold ETF, but none from the Gold Trust. Their respective holdings now stand at 798.431 tonnes and 164.41 tonnes. As we know the gold price is recovering today. So how does a genuine investor cope? [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]

China is happy because it helps its objective of acquiring as much gold as it can. We believe China is controlling the gold price because it is buying in such a way so as not to push prices up.

Silver – The silver price is still defensive waiting to see how gold behaves after the recent attack.

Regards,

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