Silver Market Morning

Gold Today – The gold price closed at $1,246.10 up $8.30 on Friday. Asia and London took it higher to $1,253.40. The euro is stronger this morning at $1.2828 up from $1.2756. The Fix was set $1,251.75 up $10.75 and in the euro at €978.847 up €6.20, while the euro stood stronger at $1.2788. The volumes of gold traded were one seller selling 8,000 ounces and one buyer buying 16,000 ounces before the pro rata arrangement kicked in. Ahead of New York’s opening, gold was trading at $1,249.30 and in the euro at €977.96.

Silver Today – The silver price closed in New York at $17.44 up 16 cents, still marking time until it sees a bigger break-out in gold. Ahead of New York’s opening it was trading at $17.40.

Gold _{(very short-term)} Gold is likely to consolidate with a positive bias in New York, today.

Silver _{(very short-term)} Silver is likely to consolidate with a positive bias in New York, today.

Price Drivers

Asian demand remains robust with premiums in India up as high as 11% and at 6% in Shanghai.

The news out of China is that growth is slightly lower at 7.3%. The government is satisfied with this level, which remains the highest in the developed/emerging world. It is now the largest economy in the world, a fact poorly broadcast in the developed world. Of the most concern to gold and silver investors is the state of the Chinese middle class. We cannot emphasize enough, that the government of China [in full control of the economy] is turning growth inwards and targeting the growth of the middle classes from which sustainable growth emanates. A drop in property prices and the internal economy facilitates such growth. The government also encourages investment in gold. So the growth of gold demand will continue for the foreseeable future on an upward path.

Yesterday, there were large sales of gold from the SPDR gold ETF of 8.97 tonnes a surprisingly large amount. And yet the gold price rose alongside a higher euro. We would have thought that such a sale would have sent the gold price strongly down, but it was absorbed by a larger appetite in Asia. No sales or purchases came into or from the Gold Trust, on Monday. 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. What we take from this is the strength of physical demand. Will we see more sales from the SPDR gold ETF as part of a larger set of sales or was that a once off? Certainly the tone for the gold market appears to have improved considerably.

With the U.S. intervening in the euro: dollar exchange rate, there appears little chance of the euro, short-term, falling, so we expect it to deter traders from trying to trade the gold price down. More likely short sellers are getting a fright from yesterday and today and are likely to reverse their positions to the long side. [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