Silver Market Morning

Gold Today – The gold price closed at $1,273.80 up $12.80 on Thursday in New York. In Asia and London the price held at that level until the Fix, where it was set at $1,273.00 up $11.25 and in the euro at €938.168 up €5.266, while the euro stood stronger at $1.3569. Ahead of the opening in New York the gold price was trading at $1,273.40 and in the euro at €938.51.

Silver Today – The silver price closed at $19.56 up 35 cents, in New York. Ahead of New York’s opening, silver was trading at $19.57.

Gold _{(very short-term)}

Gold should tackle overhead resistance, in New York today.

Silver _{(very short-term)}

Silver should tackle overhead resistance, in New York today.

Price Drivers

Once again, there were no sales or purchases from the gold ETFs in the U.S. yesterday, while the gold price drifted higher on moderate volumes. The euro is now trying to recover and is struggling to weaken, as the E.C.B. wants. The holdings of the gold ETFs continue to stand at 787.076 tonnes in the SPDR gold ETF but at 162.47, down 0.04 tonnes, in the Gold Trust. This, so far is one of those days when the underlying currents overwhelm short-term trading moves. We are watching to see if that means that overhead resistance will give way today?

It appears that an oil crisis is reappearing. With Libyan oil completely offline and an insurgency racing down through the country, oil prices [$115 Brent] are showing fears that they could race to the Basra terminal on the southern border. The dilemma facing the U.S., who considers mid-eastern oil their ‘vital interest’ and have gone to war twice, so-far, over it, is that this war across the region is a sectarian war not a national war. They must now decide if they want to be on either side? The U.S. now faces the same dilemma they faced in Syria.

The nearest we have seen to this war in history, was the 100-year war in Europe, between Protestants and Catholic. This is gold positive, but we do not believe that, at present, it is influencing gold or silver prices.

The “New Normal” is spreading across the developed world. What is it? It is a future where returning through a recovery back to the economic state it was in then, is not going to be in the future. It is an era of low interest rates, low growth for a long period of time [a decade?]. The ‘new normal’ is less resilient to other economic shocks that are bound to happen in the future. It also heavily increases the vulnerability of the currency and monetary system, itself. The arrival of the Yuan while the ‘new normal’ persists will have even more of an impact. This is very ‘gold positive! [Avoid Gold & Silver confiscation; www.Stockbridgemgmt.com 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 – Silver is quick to show its pent-up strength. [www.SilverForecaster.com]

Regards,

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