Silver Market Morning

Gold Today – The gold price closed at $1,243 on Friday, down $12 on Friday in New York. In Asia and London the price rose A$1 until the Fixed, where it was set at $1,244.75, down $9.25 and in the euro at €915.26 down €7.83, while the euro stood at $1.3600. Ahead of the opening in New York the gold price was trading at $1,245.00 and in the euro at €915.21.

Silver Today – The silver price closed at $18.74 down 24 cents, in New York. Ahead of New York, silver was trading at $18.77.

Gold _{(very short-term)}

With China closed, the gold price should consolidate with a weaker bias, in New York today.

Silver _{(very short-term)}

The silver price is should consolidate with a weaker bias, in New York today.

Price Drivers

No sales or purchases from the gold ETFs in the U.S. last Friday and yet the Technical picture is discouraging investment buyers, who are waiting for lower prices. This is why we expect lower prices this week. The holdings of the gold ETFs continue to stand at 785.279 tonnes in the SPDR gold ETF and at 163.41 tonnes in the Gold Trust. While we are expecting lower gold and silver prices this week, we reiterate our view is that the fundamentals of gold are very good going forward. Again SPDR gold sales and purchases could have a disproportionate impact on the gold price.

The drama of Russia cutting of gas supplies to the Ukraine appears to be waning as Gazprom stated it was prepared to accept a lower price. To us this validates the view that no-one stands to gain from such confrontations and Europe does not want to see gas supplies dwindle. Now the Eurozone’s attention will revert to the E.C.B. and expectations of lower interest rates and Europe’s version of quantitative easing. Consequently, we are watching a resumption of the euro’s fall as it glides down to $1.36: €1 and below. Please note that this is a lower euro not stronger dollar as the dollar is weakening against other currencies. [For more on this subscribe to www.GoldForecaster.com and visit www.Stockbridgemgmt.com to protect yourself from penalties from holding your gold overseas when it is to be confiscated].

We note a distinct change in long-term fundamentals of the solidity of large trading and currency blocs that analysts should factor into their forecasts. The move toward overall unification in Europe is stalling. The world under the currency hegemony of the U.S. dollar is decaying. As a result the long-term future of the world has gained and is gaining more and more uncertainty. This is gold positive, but sadly on the back of a decaying mo0netary world. There is little to no prospect of this trend changing as the world at all levels is moving strongly in the direction of self-interest. Advances in Technology and communication are simply accelerating this process.

Indian demand is at a low point but prices are too, as the monsoon season approaches.

Silver – The silver price is likely to show more weakness than gold this week.[More in the www.SilverForecaster.com]

Regards,

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