Silver Market Morning

Gold Today – The gold price closed at $1,296.70 up $8 on Monday, in New York, after hitting $1,308 there. In Asia and London the gold price moved back to $1,291.55. The gold Fixing was set at $1,292.75 the same as yesterday and in the euro at €939.9o8 up €0.955 while the euro stood at $1.3754 slightly weaker. Ahead of New York’s opening the gold price stood at $1,293.00 and in the euro at €942.042.

Silver Today – The silver price closed at $19.55 on Monday, in New York. Ahead of New York’s opening, it was trading higher at $19.50.

Gold _{(very short-term)}

Despite the strong move yesterday in the gold price, we still expect a strong move either way, in New York, today.

Silver _{(very short-term)}

Despite the strong move yesterday, in the silver price, which is holding, we still expect a strong move either way, in New York, today.

Price Drivers

There were sales of 2.396 tonnes of gold from the SPDR gold ETF but none from the Gold Trust on Monday. Their respective holdings stand at 780.456 tonnes and 164.02 tonnes. These sales were not large, but add to the pressure of selling from speculators and traders that came later in the day, so the gold price was pushed back to where it came from. Because this is not significant selling we expect a rebound in the gold price making the market volatile today. The pressure from fundamentals appears greater than that from the Technical picture. Speculators are not sufficient to change the underlying fundamental pressures. [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]

The dollar remains weak against most currencies but stronger against the euro. It is easy to confuse dollar weakness with euro strength. We look at the broad spectrum of moves by the leading global currencies when we say it is dollar weakness not euro strength. We do see that the euro held onto its previous weakness when it fell 2 cents after Draghi’s statement last week, as he wanted, but do not see this holding unless the E.C.B. announces moves that directly impact that exchange rate. We are waiting until June before these are announced.

While the elections in India have now finished, the results will only be out on Friday. While we said yesterday that “a new government may rule on easing restrictions on gold imports shortly” we must make it clear that we do not foresee this as being their top priority, so we must be patient. Meanwhile, the absence of Indian demand from the international gold markets [except indirectly through smugglers] is assisting in restraining gold prices internationally.

Silver – The silver price is discounting an upward move in the gold price.

Regards,

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