Silver Market Morning

Gold Today – The gold price closed at $1,250.00 down $4.60 on Wednesday in New York after falling to $1,245. In Asia and London, gold prices recovered back to $1,250. The gold price was Fixed at $1,247.00 down $8.75 and in the euro at €964.20074.507 down €10.307 while the euro was stronger at $1.2933. Ahead of New York’s opening, gold was trading at $1,240.90 and in the euro at €960.67.

Silver Today – The silver price closed in New York at $18.98 down 5 cents. Ahead of New York’s opening it was trading at $18.70.

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 purchases of 2.991 of gold into the SPDR gold ETF but none into the Gold Trust, on Tuesday. The holdings of the gold ETFs stand at 788.716 tonnes in the SPDR gold ETF and at 165.23 tonnes in the Gold Trust. In the last day the euro has continued to attempt to rally, again more than the gold price. Despite these purchases, which are not considered large, the gold price continues to slip. It now stands in a strong area of support, but will this support hold?

We believe the euro will continue to fall at least to the $1,.20 level if not further. In itself this will become and economic stimulus. The fall from $1.40 to $1.29 is already a nearly 8% fall in the price of European goods overseas. But we expect this discount to rise to around 15%. This means that the fall in the gold price in the euro is very small. We believe that this will be the case going forward, or the gold price will rise in the euro. The same applies to the Yen price of gold.

In the Eurozone France is expected to miss its deficit target. Under E.U. rules it must take steps to rectify this. The only immediate way for this to happen is for them to impose more austerity. The friction between France and Germany is likely to get worse, as a result.

The gold ‘season’ has so far had little impact on the gold price. We have pointed to potential structural changes in the gold market which are taking time to reflect in the gold price. When these changes come through, 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 .

Prices in China continue to trade at a small premium to prices in the developed world indicating that, despite the thin trading levels in the west, demand is healthy in China’s Shanghai market. Nevertheless, this year, just how will the ‘gold season’ impact gold prices for the rest of the year?

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