Silver Market Morning

Gold Today – The gold price closed at $1,307.80 down $2.70 yesterday, in New York. In Asia the gold price was lifted to $1,313 and London held those levels ahead of the Fixing. The euro weakened to $1.3926. The gold Fixing was set at $1,311 up $2.50 and in the euro at €942.081 up €2.472. Ahead of New York’s opening the gold price stood at $1,311 and in the euro at €941.13.

Silver Today – The silver price closed at $19.56 down 5 cents on Tuesday, in New York. Ahead of New York’s opening, it was trading higher at $19.69.

Gold _{(very short-term)}

We expect the gold price has the potential to break higher, but may consolidate still, today in New York.

Silver _{(very short-term)}

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

Price Drivers

Chinese demand remains strong but not chasing prices and yet is bringing in upward pressure on the gold price and by extension the silver price. Today’s gold and silver price battle is up against overhead resistance between $1,310 and $1,320. Yesterday saw 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. [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] If no sales continue during this week, then the upward pressure on the gold price may prevail. New sales from the SPDR gold ETF would have to be substantial to impact the gold price now.

The dollar continues to have a weaker bias today against most currencies. While the E.C.B. is concerned with the dollar/euro exchange rate a weaker dollar overall, exacerbates the euro’s problems. It is necessary, in the eyes of the E.C.B., to weaken the euro against all currencies, including a weakening U.S. $. But the Governing Council of the E.C.B. took no action yesterday to weaken the euro, but with it moving half a cent away from the psychologically important of $1.40, we continue to expect action from the E.C.B. to directly weaken the euro via more money printing. Any actions that weaken the euro weaken its value against gold and silver.

The Indian elections finish at the weekend, so expectations of an Indian government easing of gold and silver import restrictions come back. With ‘Official’ imports of gold down 50% but smuggling estimated at replacing half of that, expected increased demand for gold is capable of lifting the gold price substantially in the current market. However, it may be that the new government takes its time before easing restrictions and then only on a ‘graduated basis’.

Silver – The silver price is marking time as the gold price tackles overhead resistance.

Regards,

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