Silver Market Morning

Gold Today – The gold price closed at $1,295.90 down $3.00 on Tuesday’s level in New York. In Asia and early London, gold prices held that level. The gold price was Fixed at $1,294.50 down $5.75 and in the euro at €973.748 up €0.497, while the euro was weaker at $1.3294. Ahead of New York’s opening, gold was trading at $1,294.60 and in the euro at €974.67.

Silver Today – The silver price closed in New York at $19.49 down 19 cents. Ahead of New York’s opening it was trading at $19.47.

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 1.496 tonnes into the SPDR gold ETF and a purchase of 0.48 of a tonne into the Gold Trust on Tuesday. The holdings of the gold ETFs stand at 799.187 tonnes in the SPDR gold ETF and at 166.41 tonnes, in the Gold Trust.

With the dollar strengthening making the euro fall one full cent this week, traders test demand below $1,300 by buying in euros and taking a small profit in the dollar price of gold. This is continuing as the euro continues to fall. The gold price has nothing to do with the euro. These moves are based on trader’s beliefs that a strong dollar means a weak gold price. While precious metal markets remain thin this process will continue. But yesterday saw not just Asian demand drawing off gold, but in the two days of this week we have seen U.S. investors buying gold through the gold exchange Traded Funds as prices dipped below $1,300. This bodes well for the final quarter of the year when Asian and developed world demand for gold kicks in.

In China foreign [Japanese] car parts makers are being fined for overcharging on spare parts. One of the misunderstood features of Chinese growth is that they will not import western business cultures [monopolies/profits] but will make foreign companies cow tow to Chinese standards. Long-term this will eventually mean that foreign companies will face Chinese competition with their own products, which we think will overwhelm foreign imports, leaving the Chinese economy entirely self-sufficient except for resources. China is building a separate world to the developed world and will only trade so far as it benefits Chinese objectives. We see them as being eventually free from any dependence on the developed world, financially and commercially.

Standard Chartered bank is facing a further fine that may well include restrictions on its international use of the U.S. dollar. Each instance of such fines increases the drive to find alternatives to the dollar. We do not believe that the currency/monetary world has the resilience to remain stable if the currency world cracks, let alone fragments. [Subscribe www.GoldForecaster.com – ensure your gold will not be confiscated and you not penalized -see www.Stockbridgemgmt.com ].

Silver– Silver continues to fall, waiting for gold to lead the way. www.SilverForecaster.com]

Regards,

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