Silver Market Morning

Gold Today – The gold price closed at $1,312.90 up $2.40 on Monday in New York. In Asia and early London, prices fell back to $1,306. The gold price was Fixed at $1,307 down $5.75 and in the euro at €969.441 down €1.313, while the euro was slightly weaker at $1.3482 down nearly half a cent. Ahead of New York’s opening, gold was trading at $1,306.60 and in the euro at €969.22.

Silver Today – The silver price closed in New York at $20.94 up 9 cents. Ahead of New York’s opening it was trading at $20.87.

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 sales of 1.796 tonnes of gold from the SPDR gold ETF, seemingly the buyer of yesterday selling the amount he purchased yesterday[?]. There was no change in the Gold Trust holdings. The holdings of the gold ETFs stand at 803.340 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 ]. Once again this amount of sales was too small to impact the gold price.

Today we are watching the dollar strengthen against the euro and sterling. This is what we expect through the rest of the year as the prospect of higher U.S. interest rates appears on the horizon and deflation on Europe’s horizon.

We are watching this situation very carefully because while we have been reassured that this will help the Eurozone’s international competitiveness and therefore a healthy prospect for Europe, the implication that such a fall in value of the euro is under control could be far from the truth. If deflation hits hard in Europe and a European style Q.E. does not pull it out of that quagmire, then alarm bells will ring and the cry of “m’aidez” [Mayday – help me!] will go up and much greater damage will be done to the euro and Eurozone than priced in at present. This would send Europeans to gold for safety.

In the U.S. the markets are completely focused on the Fed and what they are expected to do. This focus on interest rates and when they will rise is not healthy and could bring tremendous market swings when such moves come. We note that China bought as many Treasuries as ‘tapering’ ceased to buy. This adds a volatility factor to markets in the U.S. in the next year.

Meanwhile today, gold prices have been adjusted accordingly, with the gold price slipping only slightly in the euro and more in the dollar. Gold continues to consolidate above $1,300.

Silver– The silver price pulled back with gold as more consolidation will happen this week.

We note that while gold imports to India surged in June, silver imports dropped heavily. As no duty relief came to either gold or silver there, we expect silver imports to recover from now on there. [www.SilverForecaster.com]

Regards,

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