Silver Market Morning

Gold Today – The gold price closed at $1,239.50 up $1.70 on Thursday. Asia took it slightly higher over $1,240 ahead of London’s opening. The euro is only slightly stronger than of late at $1.2805. The Fix was set $1,238.00 down $3.00 and in the euro at €966.885 down €2.495, while the euro stood stronger at $1.2804. The volumes of gold traded were two seller selling 36,000 ounces and two buyers buying 26,000 ounces before the pro rata arrangement kicked in. Ahead of New York’s opening, gold was trading at $1,237.10 and in the euro at €966.07.

Silver Today – The silver price closed in New York at $17.38 down 5 cents, still marking time until it sees a bigger break-out in gold. Ahead of New York’s opening it was trading at $17.37.

Gold _{(very short-term)} This could be a big day for gold in New York and London.

Silver _{(very short-term)} Silver will mark time or show the ‘shunt’ effect’, in New York today.

Price Drivers

The gold price is making all the moves that a cat would make before pouncing. It is holding higher levels, moving slightly down before recovering to hold the highest levels seen recently. The euro is doing the same in the market as though waiting for the next strong handed interference from the Fed or Bundesbank. Currently the euro is above $1.28 and trying to go stronger, bit by bit. Gold has been higher that the present $1,240, so may need to catch up today. U.S. based gold ETFs may signal U.S. sentiment for gold will improve, helping Asian efforts to see gold prices rise in what looks like a tidal change in the gold market. There were purchases of 1.794 tonnes of gold into the SPDR gold ETF, but none from the Gold Trust, on Thursday. The holdings of the gold ETFs stand at 760.935 tonnes in the SPDR gold ETF and at 161.40 tonnes in the Gold Trust. These purchases were the second seen in the last few weeks.

With Diwali less than a week away and India in a strong buying mood, Indian demand is robust. In China premiums of $5+ indicate robust demand there too. From the Technical to the fundamental picture there is little evidence that would support a fall in the gold price.

In the last day the global financial market mood has slipped slightly. With the Fed’s Bullard indicating that Q.E. may be extended, he sent out a signal that all is not as we hoped it would be, in the U.S. recovery. Clearly, the battle against deflation is still being fought. Over the other side of the Atlantic Draghi’s indication that there are few effective ‘tools’ left in his arsenal to fight off a coming recession. Such a recession will be a drag on the U.S. as well as the rest of the world. So how will precious metals fare in such a declining environment? We are on the brink of finding out! [Get the bigger picture - Subscribe to www.GoldForecaster.com & www.SilverForecaster.com – to protect against confiscation and penalties -see www.Stockbridgemgmt.com ]

Silver– Silver prices are still waiting for gold to lead the way. www.SilverForecaster.com

Kind Regards,

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