Silver Market Morning

Gold Today – The gold price closed at $1,337.70 up $1.90 on Friday in New York. In Asia and early London, prices mysteriously plummeted to $1,321.00. The gold price was Fixed at $1,321.25 down $15.25 and in the euro at €969.867 down €11.915, while the euro was at $1.3623. Ahead of New York’s opening, gold was trading at $1,321.60 and in the euro at €969.95.

Silver Today – The silver price closed in New York at $21.43 up 5 cents. Ahead of New York’s opening it was trading at $21.16.

Gold _{(very short-term)} We expect gold to still consolidate in New York today.

Silver _{(very short-term)} We expect silver to consolidate in New York today.

Price Drivers

On Friday again, there were sales of o.237 tonnes of gold from the SPDR gold ETF but none from the Gold Trust. The holdings of the gold ETFs stand at 800.047 tonnes in the SPDR gold ETF and at 164.28 tonnes in the Gold Trust.

When we see a sharp drop in the gold price in Asia, just ahead of the start of London’s day at the beginning of the week, when there were barely any sales of gold from the SPDR gold ETF, one becomes suspicious. This is because a seller usually wants to get the best price he can. But when sales are handled in such a way as to break the gold price down, it is clearly an attempt by traders or speculators to go short. When the fall is $16.50 in one go then it appears that the short sales are very heavy. Where these sales are ‘naked shorts’ with no physical sales, in thin markets, the impact is as we see now. If such a fall attracts physical buyers the turnaround is dramatic and the market volatile. With no specific gold-related news this morning [except for the global backdrop of increasing financial instability] we would expect the price to become volatile and the underlying current in the market to overwhelm speculative attacks like this.

With the BRICS countries now moving to finalize a competitor to the I.M.F. another step towards a separate financial world outside the developed world has been taken. It is important to gold investors to see the construction of this alternative monetary system because it portends a time when the two will be able to operate separately giving choices to all, where none currently exist. This is bad news for the monetary system as we know it but very good news for gold. Please note that this is simply building structures to assist the emerging world with no predatory attacks in mind. It is simply in the interests of the emerging world to do this. But its very existence will highlight weaknesses in the current system and cause a reaction to them, to the detriment of the developed world’s system. It is hoped that the alternative system will protect the emerging world from such damage. We see this as adding reason to why gold will come to a pivotal position in both monetary systems. [Subscribe www.GoldForecaster.com – ensure your gold will not be confiscated and you not penalized -see www.Stockbridgemgmt.com ].

Silver– Silver is on the back foot this morning following gold down. [www.SilverForecaster.com]

Regards,

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