Silver Market Morning

Gold Today – The gold price closed at $1,252.90 on Friday down $1 in New York. In Asia and London the price rose $3 until the Fix, where it was set at $1,255.00 up $10.75 and in the euro at €920.695 up €6.276, while the euro stood stronger at $1.3631. Ahead of the opening in New York the gold price was trading at $1,256.20 and in the euro at €922.86.

Silver Today – The silver price closed at $19.03 unchanged, in New York. Ahead of New York, silver was trading at $19.12.

Gold _{(very short-term)}

The gold price is moving to a strong move either way this week, in New York.

Silver _{(very short-term)}

The silver price is also moving to a strong move either way, in New York this week.

Price Drivers

Again there were no sales or purchases from the gold ETFs in the U.S. last Friday while the Technical picture still points down meaning investment buyers are waiting for lower prices. 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. Physical demand is sufficient to hold up prices, but not to drive them higher at the moment. This time round, in the absence of sellers, we expect gold and silver prices to move higher once the tight consolidation zone gives way to a breakout.

The start of the week sees a strong euro, the opposite of what Mario Draghi wanted. We are watching the dollar euro exchange rate carefully now. Markets in the developed world are myopic, focusing intently on short-term performance, judging fund managers on this almost exclusively. Standing back and getting perspective on the U.S. economy from early 2007 where huge asset bubbles burst and broke the back of credit. Since then we have seen massive injections of money to prevent a global collapse of the banking system. The banks are still standing but neither interest rates, nor lending are functioning ‘normally’ and the E.U. is more than likely to turn to quantitative easing before the end of the year to prevent deflation from savaging the economies of Europe. While there have not been major institutional collapses in Europe nothing is ‘normal’. The developed world’s financial crisis continues. It is clear that defined money supply, versus the gold price is not an indicator of real value. It takes a break in confidence to cause a readjustment in the price of gold versus money supply. The blithe hope that because we can’t hear the sound of crashing, all must be well has to be disturbed before we see such an adjustment. Is that near? We believe it is, as we now hear that Russia is threatening to turn to the Yuan in place of the dollar, if more sanctions are thrown at them. It is the break in the dollar’s hegemony and its control over the global paper money system that will precipitate the next major currency/economic crisis. We appear to be pretty close to that now![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 is marking time, ready to run.[More in the www.SilverForecaster.com]

Regards,

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