Silver Market Morning

Gold Today – The gold price closed at $1,300.60 down $5.50 on Tuesday in New York. In Asia and early London, prices fell to $1,299.20 as the euro lurched lower reaching $1.3398. The gold price was Fixed at $1,297.5 down $9.50 and in the euro at €968.428 down €4.124, while the euro was weaker at $1.3398. Ahead of New York’s opening, gold was trading at $1,298.40 and in the euro at €968.74.

Silver Today – The silver price closed in New York at $20.60 down 2 cents. Ahead of New York’s opening it was trading at $20.57.

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

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

Price Drivers

There were no sales or purchases to or from the SPDR gold ETF or from or into the Gold Trust on Monday. The holdings of the gold ETFs stand at 801.844 tonnes in the SPDR gold ETF and at 165.66 tonnes in the Gold Trust. [Subscribe www.GoldForecaster.com – ensure your gold will not be confiscated and you not penalized -see www.Stockbridgemgmt.com ].

The dollar continues to rise against other currencies. Yields on Spanish government bonds are now lower than on U.S. Treasuries. Indeed, we are only a ‘shock’ away from deflation, now reaching the level of real concerns in the E.U.

And yet the E.U has followed the U.S. in imposing sanctions against Russia on energy and on access to financial markets. Russia’s economy is already weak and likely to get weaker as all who can, move out of reach of a financial economic ‘war’. This is likely to happen on E.U. interests in Russia and yet the 40% energy dependence on Russian supplies is currently unavoidable. What damage will Russia make happen in the already weakening E.U. economy? We wait for Russian reactions. Already the vulnerable BP [high Russian exposure] has seen its share price drop 12% yesterday. We are likely to see the polarization of those involved in these issues continue as the Ukraine has moved from a simple rebellion to potentially a civil war with Russia’s support. Russia is certain to do all it can to face towards China, long term. Russia’s accumulation of gold [16.8 tonnes bought in June] may well accelerate.

China will be happy with the situation as it will benefit. China is targeting self-sufficiency so that it is not vulnerable to such situations. It ignores politics in its race to resource independence. Hence the benefits it reaps from the economic fallout is growing as the world moves to a new version of east-west divide. The east accepts the importance of gold, but so do the central banks of the west!

Today sees the announcement come from the Fed meeting. We expect another $10 billion in tapering and the dollar to go stronger. We believe there is an economic recovery that is relatively strong but can it be maintained? Gold is likely to keep recovering in the dollar and rising in the euro.

Silver– The silver and gold prices are now waiting for direction. [www.SilverForecaster.com]

Regards,

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