Silver Market Morning

Gold Today – The gold price closed at $1,287.30 down $2.00 on Friday in New York. In Asia and London, gold prices were slightly higher in both the dollar and the euro at $1,288. The gold price was Fixed at $1,287.25 down $4.75 and in the euro at €979.344 down €1.599, while the euro was weaker at $1.3144. Ahead of New York’s opening, gold was trading at $1,287.60 and in the euro at €980.17.

Silver Today – The silver price closed in New York at $19.48 down 5 cents. Ahead of New York’s opening it was trading at $19.46.

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 sales of 0.598 tonnes from the SPDR gold ETF but none from the Gold Trust on Friday. The holdings of the gold ETFs stand at 794.999 tonnes in the SPDR gold ETF and at 165.45 tonnes, in the Gold Trust.

In the E.U. it seems that an argument between Germany and France has broken out. With the anti-E.U. party in Germany gaining seats and the French people expressing great dissatisfaction will this weaken the E.U.? This change also points to a decaying economic picture. It also appears that when Draghi of the E.C.B. called for more government action he realizes that the impact that monetary policy, without coordinated government action, may well prove ineffective. Add to this scene the prospect of more E.U. sanctions on Russia. These in themselves will not disrupt the economic picture but a strong retaliation by Russia may well do so, particularly in the energy sector. We therefore expect the E.C.B. to lower interest rates still further this week, but attended by calls for more member government action.

France is calling for a lower euro, which is coming in small steps. It now stands at $1.3136 and is falling. Arbitrageurs will try to push the gold price down but Asian demand should prevent that, as we saw on Friday.

With the start of the final quarter of the year and Europeans back at their desks expect some life to be injected into the gold and silver markets any day now. The Technical picture still remains negative at the moment, above the 200-day average but below the 100 and 50-day average.

One facet of the events in gold ahead of the Second World War was the movement of Allied gold to the U.S. [unstated but clearly for safekeeping]. This concept continues in all nations, tempered only by the need for nations to keep it outside their borders to make it available as collateral in troubled times. With the growth of currency uncertainty and extent and safety of leasing, it is unsurprising that there is a move to repatriate gold back to national vaults. A question that must be considered though is just how effective is gold as collateral if it is held at home? In our newsletters we examine these issues and the extent of manipulation of gold prices over the last century. [Subscribe www.GoldForecaster.com – ensure your gold will not be confiscated and you not penalized -see www.Stockbridgemgmt.com ].

Silver– The silver price is holding its ground waiting for gold. www.SilverForecaster.com]

Regards,

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