Silver Market Morning

Gold Today – The gold price closed at $1,217.60 down $7.30 on Friday in New York. In Asia and London, gold prices slipped slightly to $1,212. The gold price was Fixed at $1,214.00 down $8.50 and in the euro at €944.747 down €4.473, while the euro was the same at $1.2850. Ahead of New York’s opening, gold was trading at $1,213.60 and in the euro at €945.28.

Silver Today – The silver price closed in New York at $17.90 down 61 cents or 3% a heavy fall. 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)} Silver should consolidate with a weaker bias, in New York today.

Price Drivers

There sales of 7.777 tonnes from the SPDR gold ETF but none from the Gold Trust, on Friday. The holdings of the gold ETFs stand at 776.440 tonnes in the SPDR gold ETF and at 164.72 tonnes in the Gold Trust. The sale of over 7 tonnes on Friday was a heavy sale. We are watching to see if this is the start of a series of sales by a large holder [of which we know there are still long term, large holders of gold through this fund [To find out who we think it is - Subscribe to www.GoldForecaster.com & www.SilverForecaster.com – to protect against confiscation and penalties -see www.Stockbridgemgmt.com ]

The Technical picture for gold still remains weak, but is coming close to its target and support, so we reiterate that we feel that we are very close to an important bottom. Below $1,200 will see demand jump very quickly, we feel.

Today see more talk from the E.C.B. indicating more will be done to boost growth by them, before December. At the same time there are more calls to boost growth not just from the E.C.B. but from the U.S. This may fall on deaf ears in Germany where they believe that the cost of their borrowing is at 1% because of the sound financial management of their economy and hard work. Therefore the concept of spending to boost growth in the E.U. [deficit spending?] is unwelcome there. This highlights the huge differences in economic culture between north and south in the Eurozone. These strains are causing friction and pointing to deflation, unless governments act! We don’t think such actions will be forthcoming. It must be remembered that gold is a haven in deflation as well as inflation.

More importantly, gold is a confidence builder when doubts about currencies rise. The euro has begun to fall again and now stands at $1.2942.

The fall of the dollar is due to the rise of the dollar, now strong against all the world’s leading currencies. In particular, we note that the Yen is just about at 110 to the dollar and headed towards its low of 120 to the dollar. This is just what the Bank of Japan wanted so they gain more international competitiveness for Japanese goods. Remember that the yen was at its strongest at 76 to the dollar. The yen price of gold has matched the fall in the gold price. Once gold turns, the Japanese gold investor will see gains come through.

Silver– Silver price has broken support and may fall more. - www.SilverForecaster.com]

Kind Regards,

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