Silver Market Morning

Gold Today – The gold price closed at $1,319.60 on Friday in New York. In Asia prices pulled back to $1,312 ahead of the London’ opening. In London it began to recover through $1,314 after the dollar, initially slightly stronger began to weaken again. The Fix gold was set at $1,313.25 down $8.25 and in the euro at €965.838 down €6.497, while the euro was weaker at $1.3597. Ahead of New York’s opening, gold was trading at $1,313.80 and in the euro at €966.88.

Silver Today – The silver price opened in London at $20.93 down 20 cents, in New York. Ahead of New York’s opening it was trading at $20.96

Gold _{(very short-term)}

We expect gold to continue to consolidate in New York today.

Silver _{(very short-term)}

We expect silver to continue to consolidate in New York today.

Price Drivers

As New York was closed on Friday, the holdings of the gold ETFs stand at 796.392 tonnes in the SPDR gold ETF and at 164.28 tonnes in the Gold Trust. Gold and silver remain in consolidation mode.

Today, the World Gold Council will hold a Forum to discuss reforming/refining the two Gold Fixing process held in London at 10.30 a.m. and at 3.00 p.m. The World Gold Council is a body set up and funded by gold producers to promote the use of gold. It has gained the respect of the entire gold world by its professionalism. It was the instigator of the gold Exchange Traded Funds across the gold world, including the SPDR gold ETF [GLD].

While the bulk of the gold market has implicit trust in the Fixings, the Barclays/Plunkett manipulation showed that the banks were capable of manipulating prices. It is hoped that the process will become considerably more transparent should the WGC Forum lead to an improvement in the process. With modern technology adding considerably to the number of tools that self-interested banks and their executives can use to their own ends, we would hope that regulators ensured that the perpetrators of such manipulations face criminal charges in the future, not just fines of the company.

More importantly, as we wrote in our newsletters of late, any such reformation should take into account that Asia is the hub of physical gold buying and selling. We have suggested that the Shanghai Gold Exchange hold one or two more gold Fixings to ensure a 24-hour gold market where prices truly reflect actual demand and supply and that volumes dealt and by whom are made transparent. We believe that if this does not happen, China will walk an independent road. [Subscribe www.GoldForecaster.com - see www.Stockbridgemgmt.com to protect yourself from penalties from holding your gold overseas when it is to be confiscated].

Silver– Silver is showing greater weakness than gold now. [www.SilverForecaster.com]

Regards,

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