Silver Market Morning

Gold Today – The gold price closed at $1,224.9 up $3.30 Thursday in New York. In Asia and London, gold prices slipped slightly to $1,223. The gold price was Fixed at $1,222.50 down $0.50 and in the euro at €949.220 down €0.389, while the euro was the same at $1.2879. Ahead of New York’s opening, gold was trading at $1,222.50 and in the euro at €951.44.

Silver Today – The silver price closed in New York at $18.51 up 2 cents. Ahead of New York’s opening it was trading at $18.43.

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 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 still remains weak, but we feel that we are very close to an important bottom.

Our comments about a fast fall in equity markets in the developed world appear to be resonating with other analysts. It is in the nature of markets that one only buys when a market is heady, because you believe it will go higher. It is now difficult to find reasons why they should.

The Shanghai Gold Exchange started trading contracts in China’s Free Trade Zone (FTZ) on Thursday giving foreigners access to the market, which, we see, as moving pricing power to Shanghai’s gold market, in a short time. The exchange has provided 11 Yuan-denominated physical gold contracts, including a large 12.5 kilogram bar, the popular one kg bar and a 100 gram contract. The new contracts that are traded at the FTZ will be linked to China’s domestic spot market, physically backed and will be transacted in the vault within the FTZ. The SGE Chairman pointed forward to a “Fixing” on the exchange too, a feature we have been forecasting for the last two years. Xu Luode, the SGE chairman said in June, “We should have gold fixing, pricing done in China itself.” We expect these moves to show China to be the world hub for gold and not simply a market supplied by London. The devolution of the power of the London bullion market will continue with the CME Group set to launch a physically deliverable futures contract in Hong Kong later this year, while the Dubai Gold and Commodities Exchange is also set to launch a spot contract in November.

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Silver– The silver price is close to finding support with gold. - www.SilverForecaster.com]

Kind Regards,

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