Silver Market Morning

Gold Today – The gold price closed at $1,313.00 up $1.40 on Thursday in New York. In Asia, gold prices rose slightly to $1,314.4 ahead of the opening in London. The gold price was Fixed at $1,313.50 down $1.50 and in the euro at €980.078 down €1.778, while the euro was stronger at $1.34.02. Ahead of New York’s opening, gold was trading at $1,312.40 and in the euro at €981.31.

Silver Today – The silver price closed in New York at $19.92 up 8 cents. Ahead of New York’s opening it was trading at $19.92.

Gold _{(very short-term)} We expect a positive bias in gold as we wait for a strong move either way, in New York today.

Silver _{(very short-term)} We expect silver to wait for gold to give direction, in New York today.

Price Drivers

There were no sales or purchases into or from the SPDR gold ETF or the Gold Trust on Tuesday. The holdings of the gold ETFs stand at 795.859 tonnes in the SPDR gold ETF and at 165.93 tonnes, in the Gold Trust. What we do hear from the U.S. is that Paulson is holding his positions in gold bullion and George Soros has doubled his holdings of gold mining company shares giving us a good perspective on U.S. professional investor’s views on gold.

The gold price may have a more active day in the U.S. as the weekend looms and we believe this is likely to be positive for the gold price.

While the U.S. economy continues to grow the pace of growth is much slower now than markets wanted to see. Across the Atlantic it is becoming clear that meaningful growth has stopped in the Eurozone. And yet the euro bonds, with yields lower than Treasuries and a central bank that is trying to incite the exchange rate of the euro down is failing to do so as the euro looks unexpectedly resilient at over $1.34. It’s almost as it we are going through a ‘turning of the tide’ leaving markets showing no decisive direction. This is where fund managers and investors show their mettle. Where will markets go next? It is one of those times when investors have to look ahead further than trading normally does and see where the ‘tide’ is going, take a position and stick to it. We take our hats off to Paulson in particular who has held his positions for a long time now and shows no signs of wavering. We think his risk will be handsomely rewarded!

We have often pointed to the rising use of the Yuan as a significant pointer to the state of the global monetary system. There are now reports out that China is doing 20% of its business in the Yuan up from 1% 2009. We believe the pace of the use of the Yuan will accelerate. China, we believe, is aiming to have the bulk of its business done in the Yuan and by pass the dollar. This will be to the detriment of the value of and confidence in, the U.S. dollar. [Subscribe www.GoldForecaster.com – ensure your gold will not be confiscated and you not penalized -see www.Stockbridgemgmt.com ].

Silver– The silver price is more cautious and tending to slip as it waits for the gold price to give it direction still. [www.SilverForecaster.com]

Regards,

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