Silver Market Morning

Gold Today – The gold price closed unchanged at $1,253 on Monday in New York. In Asia and London the price held that level until the Fix, where it was set at $1,253.50 down $1.50 and in the euro at €924.615 up €3.92, while the euro stood weaker at $1.3557. Ahead of the opening in New York the gold price was trading at $1,253.10 and in the euro at €925.41.

Silver Today – The silver price closed at $19.05 almost unchanged, in New York. Ahead of New York, silver was trading at $19.04.

Gold _{(very short-term)}

In a tight range, the gold price is moving to a strong move either way this week, in New York.

Silver _{(very short-term)}

With gold, 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. yesterday while the gold price held remarkably steady at $1,253 in an almost zero trading range. The holdings of the gold ETFs continue to stand at 787.076 tonnes in the SPDR gold ETF and at 162.51 tonnes in the Gold Trust.

Remember it did this last week while $10 lower. The E.C.B. announcements caused an immediate jump of the $10 higher, with no further moves since then. Meanwhile, the euro initially rose one cent against the U.S. dollar and is now falling quickly, with its current level at $1.3537 reaching a new recent low. We attribute the fall to the ‘carry trade’ where borrowing in the euro to invest in higher yielding foreign currencies and their markets is a good bet. With the possibility of actions to make the euro fall close to $1.20, there is a potential capital profit too. For gold investors the main development in this market is that the gold price [as we forecast] is holding steady with the dollar, while rising in the euro. We expect this to continue. And this is where gold really is a protection for people having to use the euro. With interest rates so low in the E.U. now it even pays to borrow in euros and invest in U.S. Treasuries and wait for a capital profit, as the euro falls.

Physical demand is still only sufficient to hold up prices, but not to drive them higher. With COMEX showing record short positions [many expected the gold price to plummet with the euro], but we have passed the event that was supposed to make gold fall, namely the E.C.B. announcement and no fall has happened yet. Are COMEX positions sufficient in themselves to cause the gold price to drop? No, because only 5% of them at best are linked to a physical movement of gold.[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]. Once again we see the next moves in gold and silver will be strong ones!

Silver – The silver price is marking time, ready to run.[ www.SilverForecaster.com]

Regards,

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