Silver Market Morning

Gold Today – The gold price closed at $1,310.50 up $12.20 yesterday, in New York. In Asia and London it held those levels ahead of the Fixing. The euro weakened to $1.3926. The gold Fixing was set at $1,308.50 and in the euro at €939.609. Ahead of New York’s opening the gold price stood at $1,307.45 and in the euro at €938.15.

Silver Today – The silver price closed at $19.61 up 16 cents on Monday, in New York. Ahead of New York’s opening, it was trading higher at $19.57.

Gold _{(very short-term)}

We expect the gold price to consolidate still, today in New York.

Silver _{(very short-term)}

We expect the silver price to consolidate still, today in New York.

Price Drivers

Chinese demand remains strong but not chasing prices. There were no sales from the SPDR gold ETF or from the Gold Trust. Their respective holdings now stand at 782.852 tonnes and 164.02 tonnes. This is why the gold price held the ground it yesterday and continues to do so today. [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]

Yesterday, we said, “But it is the exchange rate of the euro that is the target of the E.C.B.’s efforts.” Since then the dollar has weakened further to $1.3927 half a cent weaker than yesterday. With the Governing Council of the E.C.B. meeting today in Europe, will we see action to weaken the euro today? If not, the risk for more rises in the euro against the dollar grow rapidly. Any actions that weaken the euro weaken its value against gold and silver. Underlying these actions is the fragile economic recovery in the E.U. which is being threatened by deflation. Globally, the reactions of central banks has been, is and will be, to unleash a flood of newly printed money as seen in quantitative easing. This is gold positive despite it not being reflected in the gold price, right now. Over time, it undermines confidence in the value of the euro and the gold price rises in that currency.

When we discuss points in this report, we aim to highlight factors that will either lift or lower the gold price. We do not subscribe to highlighting points that, while they may be of importance to developed world economies, will not persuade people to buy or sell gold or silver. For instance, in the Ukraine, items that will cause financial crises may or may not cause such a reaction. Until action is taken on gas supplies or prices that crisis will not cause gold to be bought or sold to the extent it affects the gold price. Institutional reaction to U.S. economic factors may cause buying or selling of gold from or to the SPDR gold ETF. But one must be selective before one highlights a factor in gold reports as affecting prices.

Silver – The silver price continues to move with the gold price, waiting for its next move.

Regards,

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