Silver Market Morning

Gold Today – The gold price closed at $1,142.40 down another $25.30 on Wednesday. It was then taken up overnight to $1,143.8 and was then Fixed at $1,144.50 down $0.75 and in the euro at €914.941 down €2.36, while the euro stood stronger at $1.2509. The volumes of net gold traded were two sellers selling 118,000 ounces and two buyers buying 112,000 ounces before the pro-rata process kicked in. Ahead of New York’s opening, gold was trading at $1,145.40 and in the euro at €915.00.

Silver Today – The silver price closed in New York at $15.28 down 75 cents. Ahead of New York’s opening it was trading at $15.30.

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 sellers of 3.019 tonnes of gold from the SPDR gold ETF buy none from the Gold Trust on Wednesday. The holdings of the SPDR gold ETF were at 735.8 tonnes and in the Gold Trust at 160.42 tonnes. In the absence of sufficient Asian demand such sales add to the impact traders and momentum sellers are having on the gold price.

The euro has stopped falling against the dollar for the time being at $1.2523 up from $1.2485, despite the degenerating economic news from Germany. This has caused the gold price to pause in its fall, at the moment. The Technical picture continues to be negative.

The Republicans have stated that they will not close government down again so as to avoid the ‘fiscal cliff’ and a potential credit rating downgrade again. Let’s hope that this will in fact be the case, but wait to see if it is.

Oil prices continue to fall in what is a global stimulus for the world’s economies. Saudi Arabia, in giving the U.S. and the world cheaper oil, as well as continuing its high production levels, is undermining U.S. oil production from ‘fracking’, through prices that continue to fall. It will take some time before this impacts U.S. oil production. In the average consumer’s pocket the fall in the oil price gives him over 1.5% extra disposable income.

History shows an indirect link between the oil and the gold price. In 1971 the oil price was at $8 a barrel. It then rose to $35 a barrel while gold moved from $42 an ounce up to $160 at the same time. Gold then went on to rise much higher because of the impact on the monetary system, inflation and value of the dollar the oil price brought about. The current fall in the oil price implies deflation and a hardening dollar, but with the vast amount of excess dollars now in circulation globally the value of the dollar is not likely to continue to harden for too much longer. [Get the bigger picture - Subscribe to www.GoldForecaster.com & www.SilverForecaster.com – to protect against confiscation and penalties -see www.Stockbridgemgmt.com ]

Silver– Silver remains heavily oversold. www.SilverForecaster.com

Kind Regards,

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