Silver Market Morning

Gold Today – The gold price closed at $1,246.30 on Tuesday, up $3.20 cents in New York. In Asia and London the price slipped slightly by $1 until the Fix, where it was set at $1,246.00 up $1.75 and in the euro at €915.840 up €1.421, while the euro stood at $1.3605. Ahead of the opening in New York the gold price was trading at $1,246.00 and in the euro at €915.27.

Silver Today – The silver price closed at $18.84 up 9 cents, in New York. Ahead of New York, silver was trading at $18.83.

Gold _{(very short-term)}

The gold price could react to the E.C.B. announcements, in New York today.

Silver _{(very short-term)}

The silver price should follow gold either way, in New York today.

Price Drivers

There was a purchase of 1.797 tonnes into the SPDR gold ETF yesterday while there was no change in the holdings of the Gold Trust. This left their holdings at 787.076 tonnes in the SPDR gold ETF and 163.41 tonnes in the Gold Trust. This shows that on balance U.S. institutions are turning positive on gold ahead of the E.C.B. announcements today.

The focus of the gold market today is now on the unfortunate Mario Draghi with the full weight of not just the E.C.B. on his shoulders, but of the E.U. itself. The governments of the E.U. are now even less able to promote effective growth in that region at a time when it is needed to stave off deflation. The ball is thrown into his court. Neither he nor the E.C.B. can do it without the full support of the member states of the E.U. All he is expected to do today is to lower interest rates to zero or lower and to produce some sort of Q.E. to stimulate liquidity in the hope that it drop’s the euro’s exchange rate to the point where E.U. competitiveness is bolstered and through that, growth is achieved.

Many institutions expect the gold price to follow the euro down assuming that the gold price will go the opposite way to the dollar like the euro does. But we have seen the gold price move independently of both recently. Will it do so today or will it fall too? It should rise as the economic dilemma facing Europe elevates uncertainty, benefitting the gold price. That makes today a potentially lively day for gold and silver. Let’s see what happens.

The gold price has settled at $1,245 waiting for reactions. The gold price could go either way. We repeat that the fundamentals favor higher prices whereas the Technical picture favors lower prices, but not much lower. [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].

Silver – The silver price remains driven by investment factors not industrial factors [More in the www.SilverForecaster.com]. It will follow gold today, as usual.

Regards,

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