Silver Market Morning

Gold Today – The gold price closed at $1,254.60 down $1.00 on Tuesday in New York. In Asia and London, gold prices held $1,256.00. The gold price was Fixed at $1,255.75 down $0.25 and in the euro at €974.507 down €0.27 while the euro was unchanged at $1.2886. Ahead of New York’s opening, gold was trading at $1,253.00 and in the euro at €967.90.

Silver Today – The silver price closed in New York at $19.03 down 2 cents. Ahead of New York’s opening it was trading at $19.05.

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

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

Price Drivers

There were no sales or purchases of gold to or from the SPDR gold ETF or the Gold Trust, on Monday. The holdings of the gold ETFs stand at 785.725 tonnes in the SPDR gold ETF and at 165.23 tonnes in the Gold Trust. In the last day the euro has attempted to rally more than the gold price, which is hanging back. The gold market volumes remain thin in London and New York still, but the gold price has stopped falling for the moment as it encounters support. The market is certainly waiting for Asian demand to seep across to the developed world markets. The demand is there, but it is not reaching London or New York. Why?

There are several moves to ship gold directly into China and India, by-passing London, including increasing the number of importing banks and expanding gold refining in India to London ‘good delivery’ standards. There is nothing to stop miners shipping roughly refined bars to the refiners, not only in Switzerland but now PAMP in India. We expect the same in China in time, as it becomes the Asian gold hub. The center of scrap sales is also Asia, while in the developed world, jewelers will re-refine the scrap they receive for other jewelry, so the quantities of scrap in the developed world that goes back into the main bullion markets at international standards, are not that large.

Just how much Asian demand goes through London and New York is also not clear.

With the international gold market opening in Shanghai on the 18^th September, will their prices be more pertinent to the gold prices? In this period of transition it is not possible to re-adjust supply levels in London to compensate for those going directly to Asia, as these statistics are not available. So the current prices in the developed world may well not be an accurate reflection of demand / supply. As we said yesterday, “Once China is a gold hub we expect to see arbitrageurs smooth out these differences” between the international markets. Then we expect the Asian gold price to dictate gold and maybe silver prices. Subscribe to www.GoldForecaster.com & www.SilverForecaster.com – to protect against confiscation and penalties -see www.Stockbridgemgmt.com.

Silver– The silver price is waiting for gold to give direction. www.SilverForecaster.com]

Kind Regards,

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