Silver Market Morning

Gold Today – The gold price closed at $1,221.60 down $13.90 on Wednesday in New York. In Asia and London, gold prices recovered slightly to $1,224. The gold price was Fixed at $1,223.00 down $13.50 and in the euro at €949.609 down €4.628, while the euro was slightly much weaker at $1.2879. Ahead of New York’s opening, gold was trading at $1,223.80 and in the euro at €950.19.

Silver Today – The silver price closed in New York at $18.49 down 22 cents. Ahead of New York’s opening it was trading at $18.53.

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

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

Price Drivers

There were no sales or purchases to or from the SPDR gold ETF and none to or from the Gold Trust, on Wednesday. The holdings of the gold ETFs stand at 784.217 tonnes in the SPDR gold ETF and at 164.72 tonnes in the Gold Trust.

The Technical picture for gold remains weak. At current and lower prices, Asian demand may well come in to get bargains. We also see scrap sales of gold falling from the 1,200 tonne level of last year and more gold miners moving to higher grade reserves as gold prices fall.

Equity markets in the U.S. rose on the search for yields as the date for interest rates to rise appeared to be indefinable with Janet Yellen, clarifying, again, that it would be a ‘considerable period’ before they rose and the date would depend on data. The fixation on when U.S. rates would rise is strange in that it distracts from looking at the recovery. While growth is solid, inflation is falling, so we are looking to see if the disappearance of QE will bring back the specter of deflation? After all, the safety of the banks and the fear of further shrinkage was why QE was introduced. When interest rates do rise, we expect equity market to fall fast because the ‘new normal’ Yellen has described today’s conditions as, does not point to a rosy pre-2007 economy. We feel equity prices are already too high, but could go higher.

The Trade deficit in the U.S. has fallen from its past peak of $720 billion per annum back to an extrapolated $117.60 billion [as oil imports fall], which is strengthening the dollar as other leading world currencies weaken, happily. Because of this strength we would not be surprised to see China weaken the ‘peg’ it has to the U.S. dollar.

Today is an important day for gold as the International board of the Shanghai Gold Exchange is opened ahead of schedule. As we have highlights in earlier ‘Market Morning’ this we feel will precede the shift of ‘pricing power’ to China. We also feel it will considerably reduce the ability of New York and London to pull the gold price back as the dollar strengthens and allow gold to reflect demand and supply interaction more accurately. More on this if you - Subscribe to www.GoldForecaster.com & www.SilverForecaster.com – to protect against confiscation and penalties -see www.Stockbridgemgmt.com .

Silver– The silver price is at bargain levels for industry now. - www.SilverForecaster.com]

Kind Regards,

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