Silver Market Morning

Gold Today – The gold price closed at $1,298.90 down $5.20 on Monday’s level in New York. In Asia and early London, gold prices hugged the $1,300 level. The gold price was Fixed at $1,300.25 down $2.50 and in the euro at €973.251 up €0.323, while the euro was weaker at $1.3360. Ahead of New York’s opening, gold was trading at $1,300.50 and in the euro at €974.12.

Silver Today – The silver price closed in New York at $19.68 up 6 cents. Ahead of New York’s opening it was trading at $19.67.

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

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

Price Drivers

There were purchases of 1.832 tonnes into the SPDR gold ETF but none into the Gold Trust on Monday. The holdings of the gold ETFs stand at 797.691 tonnes in the SPDR gold ETF and at 165.93 tonnes, in the Gold Trust. The purchase slowed attempts by traders to push prices down. Should we see a large purchase now into the SPDR gold ETF we are sure it will push prices back up against overhead resistance once more. But we need to see a swell in demand before the gold price can break overhead resistance and move much higher.

The market remains thin and easily pushed around, to a small degree, by traders. We expect this to remain the situation until September arrives, as we have said before. Many have expected the geo-political disturbances in Iraq and in the Ukraine to have had much more influence on the gold and silver prices. However, it is clear that for any news item to do that it needs to be related to investors who will go out and buy or sell gold and silver in markets directly affected by that news. But these two items will have an impact on longer term stability and uncertainty and this will influence gold and silver investors, but not immediately. Hence the quiet markets in gold and silver for the last few months. These news items could burst open into more serious gold-related items should they lead to a broad economic decline or to a direct impact on the oil price.

We saw a report today that said $20 billion of property has been bought in the U.S. recently. The Chinese felt that it could not be confiscated there. They are right if they themselves move to their property too, but if they don’t their government need only to pressure them to sell to force them to repatriate their funds. But it brings to the fore the concept seemingly accepted in China that the gold owned by individuals, remains theirs until the government decides that it is needed for strategic financial reasons. This does not deter Chinese buyers of gold.

The euro has begun to weaken again, dropping half a cent this week, so far. Arbitrageurs sell New York gold and by gold in the euro to smooth out the difference. But we continue to expect gold to rise in all currencies when the market moves out of the ‘doldrums’. [Subscribe www.GoldForecaster.com – ensure your gold will not be confiscated and you not penalized -see www.Stockbridgemgmt.com ].

Silver– Silver is cautiously waiting for gold to lead the way. [www.SilverForecaster.com]

Regards,

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