Silver Market Morning

Gold Today – The gold price closed at $1,282.10 down $14.70 on Thursday in New York. In Asia and early London, prices rose to $1,287.30 as the euro slowed its fall to $1.3389. The gold price was Fixed at $1,284.50 down $10.50 and in the euro at €959.155 down €7.768, while the euro was unchanged at $1.3392. Ahead of New York’s opening, gold was trading at $1,287.30 and in the euro at €961.46.

Silver Today – The silver price closed in New York at $20.37 down 25 cents. Ahead of New York’s opening it was trading at $20.47.

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

Silver _{(very short-term)} We expect silver to follow gold, 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 Thursday. 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 ].

Once again the gold market was thin and there was a physical-free, fall in the gold price. The gold price was moved back to the lower support level below the 50, 100, 200 day support levels. Because trade was so thin, we wonder if this move will be considered real or will Asian demand come in and on low demand levels drive prices higher above these important Technical levels. It seems so as Shanghai premiums are now at $3.20.

Alongside the falls in gold and silver we saw the entire year’s gains in the Dow wiped out as it fell back to 16,563.3 in one day. We started our commentary this week by saying another slice of stability and certainty had been removed by world events. In a market that was rising primarily because yields were much better in equity markets than in bonds, not because of confidence in the economic future of the developed world, there comes a point where the future is overpriced. It then waits for a trigger before there is a rush for the exits through protective stop losses, high Frequency Trading and the like. The rout started in Europe, showing just how integrated global financial markets are now. The august figure of Greenspan saying that such markets were ready for a correction impacted for sure. But as in 2008/9 after an initial fall in the gold price, the gold price moved from $1,000 – to $1,900+ over the next few years because of fears of the future and the value gold has, as cash, as well as an asset.

The big fear is now that this fall may be more than just a correction in equity markets. With an emasculated government mired in partisan politics and an E.U. not much better off are we on a watershed for markets? Gold usually does well after initial falls in such markets.

Silver– Silver fell 1.5% against gold’s 1% and may fall further still if gold continues to fall. [www.SilverForecaster.com]

Regards,

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