Silver Market Morning

Gold Today – The gold price closed at $1,293.30 the same as Friday in New York. In Asia and early London, prices slipped to $1,291 as the euro fell back to $1.3394 from $1.3424. The gold price was Fixed at $1,292.75 down $0.75 and in the euro at €965.027 up €1.454, while the euro was weaker at $1.3406. Ahead of New York’s opening, gold was trading at $1,292.50 and in the euro at €965.07.

Silver Today – The silver price closed in New York at $20.34 also unchanged. Ahead of New York’s opening it was trading at $20.23.

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

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

Price Drivers

There were sales of 1.796 tonnes of gold from the SPDR gold ETF but there was a small sale from the Gold Trust of 0.04 of a tonne on Monday. The holdings of the gold ETFs stand at 800.048 tonnes in the SPDR gold ETF and at 165.93 tonnes, in the Gold Trust. [Subscribe www.GoldForecaster.com – ensure your gold will not be confiscated and you not penalized -see www.Stockbridgemgmt.com ].

Now that the E.U., through Portugal, has taken a very different route to resuscitating one of the leading banks in Portugal we see the market has accepted this way as it hits only shareholders and junior creditors. In the future it could well hit senior creditors, but taxpayers and depositors have been left untouched. The decision shielding some creditors spurred a rally in bank stocks and Portuguese assets yesterday as it demonstrated authorities were able to quarantine a bank without causing market tensions that have held the E.U. on the edge of a crisis since 2009. This is a far fairer approach than forcing losses on unsecured depositors [who never thought of themselves as creditors, but as ‘allocated owners’ of the money they deposited rather like gold owners of ‘allocated’ gold]. This is a critical change of rules from the days of Cyprus’ crisis! It seems the E.U. has been sensitized to the ‘big’ picture rather than a myopic accountant-like view. If this is indeed the way forward in the E.U. it will bring some confidence back into markets.

Global problems have never been quite so threatening on the economic, oil and general stability fronts since the last World War, but markets continue to ignore them. It seems threats to stability and uncertainty have to be very specific and the impact definable before they react. This makes for sideways movements then precipitous falls or rises, rather than gentle slopes in market price movements. This is part of the ‘new normal’.

Certainly, this is moving the gold and silver markets to that pattern in the future. Hence, we do expect the Technical picture to be increasingly more difficult to read going forward. For the precious metal trader this takes his risks several notches higher. For the longer term investor, his analysis has to be in depth and global for him to get the full benefit from his investments.

Silver– Silver faces the same change in approach as gold. [www.SilverForecaster.com]

Regards,

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