Silver Market Morning

Gold Today – The gold price closed at $1,306.50 down $6.40 on Tuesday in New York. In Asia and early London, prices rose to $1,308. The gold price was Fixed at $1,307.50 up $0.50 and in the euro at €971.036 up €1.595, while the euro was slightly weaker at $1.3465. Ahead of New York’s opening, gold was trading at $1,308.40 and in the euro at €971.42.

Silver Today – The silver price closed in New York at $20.94 the same as yesterday. 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 1.497 tonnes of gold into the SPDR gold ETF, a small amount, not enough to move the gold price but reflecting the ongoing positive attitude to gold in the U.S. The holdings of the gold ETFs stand at 804.837 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.

We see the ongoing fall of the euro and rise of the dollar relative to gold in a different light to most. We do see the E.C.B. engineering the euro back to around $1.20 [another 10%] by year’s end, irrespective of the state of that economy. Even if, remarkably the E.U. recovery became real, this fall would still be made to happen. It could go further because the recovery there is not real and faces significant dangers. Throughout this time, we expect dealers, traders and arbitrageurs try to take the gold price down with it. But, as you have seen of late, the gold price has risen with both the dollar and the euro. It has also fallen against both. We do expect the gold price to remain separate from the euro’s moves in the future. Investors appear more inclined to ignore the assumption gold moves contrary to the U.S. dollar and on the back of real global demand. Unfortunately, such assumptions are considered ‘normal’, but normalities have a habit of being changed to ‘new normals’.

One such new ‘normal’ that is proving increasingly worrisome is the use of sanctions and punishments to dominate the use of the U.S. dollar. After BNP Parisbas’ prevention from using the dollar next year, the mere threat of sanctions against Russian oligarchs is causing a shift of their $46 billion out of London and no doubt the Pound and the dollar. We can only imagine what concern this is causing in the halls of most central banks and boardrooms. Add to this the shift of head offices to more tax friendly jurisdictions of U.S. companies fleeing such financial ‘imperialism’. This will become a broad shift from the dollar, irrespective of events around the Chinese Yuan. When the inclusion of gold in the global monetary system comes, we see it as being welcomed with open arms.

Silver– The silver price is holding its ground firmly. [www.SilverForecaster.com]

Regards,

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