Silver Market Morning

Gold Today – The gold price closed at $1,229 down $2.00 on Monday. Asia and London took it up to $1,230.30. The euro is stronger this morning at $1.2735. The Fix was set $1,229.25 up $0.50 and in the euro at €964.572 down €2.263, while the euro stood stronger at $1.2744. The volumes of gold traded were one seller selling 30,000 ounces and three buyers buying 50,000 ounces before the pro-rata process kicked in. Ahead of New York’s opening, gold was trading at $1,228.80 and in the euro at €965.01.

Silver Today – The silver price closed in New York at $17.25 up 5 cents. Ahead of New York’s opening it was trading at $17.23.

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

In New York there were sellers of 1.794 tonnes of gold from the SPDR gold ETF but there were no sales or purchases from or to the Gold Trust on Tuesday. The gold price still remains in consolidation mode. The holdings of the gold ETFs stand at 743.593 tonnes in the SPDR gold ETF and at 161.69 tonnes in the Gold Trust.

The oil price in 1973 rose from $8 a barrel to $35 a barrel as a result of it being the will of the U.S. as well as of O.P.E.C. This generated a demand for dollars the like of which had never been seen before. It went a long way to establishing dollar hegemony. The tremendous weakening of the dollar, as reflected by gold’s rise to $850 from $42 was ignored because of the need for dollars to buy oil with.

The rise through to $110 and higher, in this century, reinforced that situation. By ensuring that only dollars were used to buy oil the dollar was more than just ’valuable money’, it was needed by all nations who imported oil. Other nations followed suit, but all currencies relied on the U.S. dollar as the foundation of the currency system that did away with gold.

Today, we see a change in that situation as the Yuan approaches its role as an international currency and oil prices drop, possibly back to $70 - $75. Saudi Arabia wants this because if it doesn’t, then it will see its strength as the leading world supplier of oil undermined. It is also emphasizing its role as the controller of the oil price. It is this developing theme that will affect the gold and silver price in the future. What is very clear to the savvy, is that the days ahead, when we see the symptoms of the coming change in oil prices and a change to a multi-currency system. Gold will be needed as ‘oil on troubled waters’. [Get the bigger picture - Subscribe to www.GoldForecaster.com & www.SilverForecaster.com – to protect against confiscation and penalties -see www.Stockbridgemgmt.com ]

We wait for the FOMC statements today, which may affect gold.

Silver– Silver prices are now ‘marking time’ again, waiting for gold to give direction. www.SilverForecaster.com

Kind Regards,

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