Silver Market Morning

Gold Today – The gold price closed at $1,166.90 down $5.50 on Monday. On Tuesday, Asia and London held it there before it slipped to $1,165. The euro is slightly stronger this morning at $1.2509. The Fix was set $1,169.25 down $1.50 and in the euro at €933.91 down 6.90 up down €2.99, while the euro stood stronger at $1.2520. The volumes of net gold traded were one seller selling 8,000 ounces and one buyer buying 16,000 ounces before the pro-rata process kicked in. Ahead of New York’s opening, gold was trading at $1,169.20 and in the euro at €933.94.

Silver Today – The silver price closed in New York at $16.16 unchanged. Ahead of New York’s opening it was trading at $16.07.

Gold _{(very short-term)} Gold will continue to look for a bottom, in New York, today.

Silver _{(very short-term)} Silver is likely wait for gold to find a bottom, in New York, today.

Price Drivers

In New York there were no sellers or buyers of gold from or to the SPDR gold ETF but there was a sale of 0.51 tonnes from the Gold Trust on Monday. The holdings of the SPDR gold ETF were at 741.210 tonnes and in the Gold Trust at 160.82 tonnes. It is obvious that longer term investors in the gold ETFs are not keen to sell at these low levels. The fall so far has been too brutal. Traders moving the gold price in line with the euro hold sway, but the moment physical demand or supply comes in the gold price may move forcefully again. The demand from Asia has not come in yet, so whether we see more falls or a bounce is not dependent on traders, so much as it will on investors sitting on the sidelines, at the moment.

Today sees mid-term elections take place in the U.S. Some expect a break in the political gridlock that has mired U.S. politics for so long and for the Republican agenda to move to center stage, but the incumbent Democratic President may de-rail such a change. Others see a major battle in U.S. finances coming as the President is challenged over government finances. Politics rules Finance, at the end of the day. Politics behind finances may not be beneficial to the U.S. economy or the dollar, right now. The downgrading of the U.S. credit rating was the result last time. This time around, it is the global economy that will be drawn in too. For gold investors this is the main issue of these elections. Will it result in a weaker dollar, as most ‘hard’ currencies are doing their level best to weaken? Let’s see.

This morning saw poor Asian demand. It appears that they are holding back waiting for lower prices. To us, this means a build-up of demand while they wait. [Get the bigger picture - Subscribe to www.GoldForecaster.com & www.SilverForecaster.com – to protect against confiscation and penalties -see www.Stockbridgemgmt.com ]

Silver– Nervous silver prices are waiting for gold to move. www.SilverForecaster.com

Kind Regards,

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