Silver Market Morning

Gold Today – The gold price closed at $1,290.50 $2.50 down from yesterday, in New York. In Asia the price rose to $1,295.20 and London held it there. The gold Fixing was set at $1,294.50 up $2.50 and in the euro at €945.926 up €3.273 while the euro stood weaker at $1.3685. Ahead of New York’s opening the gold price was at $1,296.00 and at €947.37.

Silver Today – The silver price closed at $19.45 up 4 cents yesterday, in New York. Ahead of New York’s opening, it was trading at $19.60.

Gold _{(very short-term)}

The gold price will continue in a tight range before a strong move either way, in New York.

Silver _{(very short-term)}

The silver price will continue in a tight range before a strong move either way, in New York.

Price Drivers

India has begun to slowly ease restrictions on gold imports by permitting importing banks to make gold loans to jewelry manufacturers. This is the first step in the process and begs the questions, “Is more easing of these restrictions on the way? [More on this in the next issue of the Gold Forecaster - www.GoldForecaster.com] This adds pressure on the gold price from next week onward as it could lead to another 5 tonnes per week demand being seen in the London gold market. As we said yesterday this will happen in a relatively balanced market, so should reflect in the price of gold.

The Russia/China Gazprom deal was signed yesterday and while final details are not available the deal was not signed in the U.S. Dollar but in Rubles/Yuan. This is a significant blow to the dollar as the currency for global energy pricing. The precedent this sets is bound to be reflected in more and more global energy deals to the detriment of U.S. Dollar hegemony. By extension, in time, it will have a fundamental impact on the global monetary system as these two currencies qualify as energy pricing currencies and require that they be added to global central bank foreign exchange reserves. This is also gold positive!

More confirmation of the long period expected before U.S. interest rates are going to rise was supplied in the minutes of the last Fed meeting. Again the pressure from the markets and media for a date when interest rates are going to rise has been deflected by the repeated statements from Fed officials that it is economic data that will dictate these. It is also clear to the Fed that the recovery must reach sustainable levels at the lowest category of consumers, before such moves can be made. This remains a long, long way off.

There were more substantial sales of 3.295 tonnes of gold from the SPDR gold ETF but none from the Gold Trust yesterday. Their respective holdings stand at 776.893 tonnes and 164.02 tonnes. This did pull the gold price back to $1,290 but Asia quickly lifted the gold price back to $1,295 this morning. This shows the strength of support from Asia!

Silver – The silver price remains inclined to rise more than gold when gold starts to move higher. [More in the www.SilverForecaster.com]

Regards,

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