Silver Market Morning

Gold Today – The gold price closed at $1,248.30 up $2.30 on Tuesday. London took it down to $1,246.3. The euro is weaker this morning at $1.2692 down from $1.2828 in a volatile market. The Fix was set $1,246.75 down $5.00 and in the euro at €982.080 up €3.233, while the euro stood stronger at $1.2695. The volumes of gold traded were two seller selling 30,000 ounces and one buyer buying 10,000 ounces before the pro rata arrangement kicked in. Ahead of New York’s opening, gold was trading at $1,246.10 and in the euro at €982.00.

Silver Today – The silver price closed in New York at $17.51 up 5 cents, still marking time until it sees a bigger break-out in gold. Ahead of New York’s opening it was trading at $17.40 still.

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

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

Price Drivers

With Diwali tomorrow, Asian demand remains robust. The gold price is reflecting this in part as it sits above the 50-day average. Certainly short sellers will be deterred by this and may take it higher. In New York there were no sellers of gold from the SPDR gold ETF and none from the Gold Trust. 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. This is also positive for the gold price.

But the reason the gold price is lower today in the dollar is because of the lower euro, which dropped over a percentage point today. As you can see the gold price rose in the euro while it fell. Today will be interesting in that we will see if physical demand dominates the currency factor.

What we are seeing now across the world are tacit acceptances that if an economy is in strife economically, then it is acceptable to institute policies that weaken their exchange rates. This was described by HSBC as, “This is about deflation, exporting your deflationary problems to someone else.” So we ask, “Who is there out there that will accept such policies?” The U.S. has already made it clear that they do not want to see a stronger dollar and appear to be intervening in the foreign exchanges to ensure that. On the other hand Draghi of the E.C.B. has made it clear he welcomes a weaker euro. To struggling economies such policies are an economic survival tactic, but they will be at the expense of stronger economies. As the global economy weakens, these currency wars will grow, despite a G-20 agreement not to follow such policies.

This is also positive for gold and will speed up the day when gold walks a road independent of currencies.[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