Silver Market Morning

Gold Today – The gold price closed at $1,304.90 down $1.60 on Wednesday in New York. In Asia and early London, prices fell to $1,297. The gold price was Fixed at $1,300.00 down $7.50 and in the euro at €964.678 down €6.358, while the euro was slightly stronger at $1.3476. Ahead of New York’s opening, gold was trading at $1,299.50 and in the euro at €964.59.

Silver Today – The silver price closed in New York at $20.92 down 2 cents. Ahead of New York’s opening it was trading at $20.88.

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 0.598 tonnes of gold into the SPDR gold ETF, not enough to move the gold price but again reflecting the ongoing positive attitude to gold in the U.S. The holdings of the gold ETFs stand at 805.435 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 ].

In thin trade the gold price is being moved around by dealers and traders looking to create action in the market. With the correction in the euro underway, taking it to $1.3483 up from $1.3456 before it slipped back to $1.3473 we expect gold to consolidate further at these levels. Dealers attempted to take the gold price down into the mid $1,290 are before the Fixing showed a better demand/supply level at $1,300.

A gold price of below $1,300 tends to attract Asian buyers. In the past few years the gold price showed strength during what used to be called the “Doldrums” between May and the beginning of September because of developed world financial crises. However, when these are not at work this period sees a dearth of demand as Indian monsoons and the subsequent harvest times are underway. Indian agricultural demand comprised 70% of gold demand in India. This has been complicated now by urbanization and the import restrictions imposed last August in India. But, despite these, June saw gold demand from India rise over 65% this year. The conclusion we draw from this is that Indian demand will come in as prices go below $1,300 but will not chase prices above that. Chinese demand is not seasonal and we see this as being less price sensitive than Indian demand.

When developed world demand comes in September as the manufacture of gold items for the year end festive season begins the “gold season” begins, globally, once more. It is at this time that if developed world investors see prices rise they will run in to take prices higher. Even now the fundamentals for both gold and silver remain firm.

Silver– The silver price is being moved around by dealers with gold. [www.SilverForecaster.com]

Regards,

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