Silver Market Morning

Gold Today – The gold price closed at $1,293.30 up $11.20 on Friday in New York. In Asia and early London, prices held at $1,293.80 as the euro rallied to $1.3424. The gold price was Fixed at $1,293.50 up $9.00 and in the euro at €963.573 up €4.418, while the euro was up at $1.3424. Ahead of New York’s opening, gold was trading at $1,291.90 and in the euro at €962.88.

Silver Today – The silver price closed in New York at $20.34 down 3 cents. Ahead of New York’s opening it was trading at $20.37.

Gold _{(very short-term)} We expect gold around $1,300+, 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 but there was a small purchase into the Gold Trust on Friday. The holdings of the gold ETFs stand at 801.844 tonnes in the SPDR gold ETF and at 165.97tyonnes, up 0.31 of a tonne, in the Gold Trust. [Subscribe www.GoldForecaster.com – ensure your gold will not be confiscated and you not penalized -see www.Stockbridgemgmt.com ].

You thought the Eurozone debt crisis was out of the way? On a sunny summer’s day it made its dark appearance again in Portugal one of the country’s that exited the bailout program. The misleadingly named bank, ‘Banco Espirito Santo’ will be broken up with shareholders carrying the losses [a ‘bail-in] and a ‘good bank’ being formed to receive a loan of €4.9 billion [$6.6 billion] from the government but not to be owned by the government. Depositors are assured that they will not be touched. The €1 billion raised a month ago by the bank has been swallowed up in the losses.

We are dependent on banks more than ever seen in man’s history. So the conflict of interests of bankers [driven by profits], government [control of the monetary system] and all involved in the economy [liquidity and money availability] is starkly revealed when an event like this happens. This is another blow to our trust in the banking and monetary systems.

With France now saying that deflation is a ‘real risk’ Thursday’s meeting of the E.C.B. should see more stimuli to prevent this, but we believe nothing to will happen until the end of the year. Tragically governments on both sides of the Atlantic are not producing growth even as we all watch the continuing shift of wealth and global cash flow to the east. Central banks cannot fill their shoes. Against such a background we feel that gold is at a very opportune level for longer-term investors.

With gold dancing around the $1,300 level, we see Asia responding as buyers below this level. As this is the key gold price driver we expect prices to hold these levels until developed world demand kicks in as the gold season starts after the end of August, unless we see more ‘shocks’ to the monetary system.

Silver– Silver will be less volatile than gold. [www.SilverForecaster.com]

Regards,

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