Silver Market Morning

Gold Today – The gold price closed at $1,310.50 down $9.10 on Friday in New York. In Asia and early London, prices rose to $1,315. The gold price was Fixed at $1,312.75 up $2.50 and in the euro at €970.754 up €2.35, while the euro was slightly weaker at $1.3523. Ahead of New York’s opening, gold was trading at $1,315.10 and in the euro at €972.20.

Silver Today – The silver price closed in New York at $20.85 down 29 cents. Ahead of New York’s opening it was trading at $20.97.

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

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

Price Drivers

There were purchases of 1.796 tonnes of gold into the SPDR gold ETF, an encouragement to further short covering on Friday, but none from the Gold Trust. The holdings of the gold ETFs stand at 805.136 tonnes in the SPDR gold ETF and at 165.06 tonnes in the Gold Trust. [Subscribe www.GoldForecaster.com – ensure your gold will not be confiscated and you not penalized -see www.Stockbridgemgmt.com ].

Sometimes, developed world investors are puzzled that demand out of Asia can be robust and yet not lead to rising prices. This is because of the entirely different psyche of Asian buyers to developed world buyers. In the developed world markets, the focus is entirely on the short–term and short-term profits. Positions are held for the long term only when long-term profits are expected. The bulk of market players follow this thinking because they are measured on performance. Sadly it shifts the focus from the investment to the individual or institution managing funds, often to the detriment of long-term performance. Consequently, such buyers only buy when they believe a rise in prices is imminent.

Asian buyers, on the other hand, trust gold and silver as long-term investments and not for short-term gains, so they buy when they feel the price has fallen too much, wanting to get in as low as possible. They have full confidence in the long-term and rarely sell for profit alone. So their buying is a persistent and on-going. They don’t chase prices because they don’t look for short-term profits. They want a secure financial future that they feel is in an investment that will always win out long-term. Since 1971 they have been overwhelmingly right.

The technical picture remains positive for gold and silver.

While world events such as the Gaza and Ukraine conflicts have filled the news over the weekend, we do not believe they have been the cause of buying and selling of gold and silver. The biggest short-term reason for the rise in prices of gold and silver has been the massive attempts to short the market on COMEX and the subsequent short-covering. In the last week we have seen U.S. physical gold buying rise consistent with our view that U.S. perceptions of the gold and silver prices have changed to the upside. We expect this to continue.

Silver– Silver demand from industry and from investment is robust. The investment side of silver continues to reflect the remarkable performance it showed last year. Hence we expect silver to continue moving as a monetary metal with gold prices. [www.SilverForecaster.com]

Regards,

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