Silver Market Morning

Gold Today – The gold price closed down at $1,149.40 by $24 in New York on Monday. It then moved up slightly to $1,152.30 before London’s opening. It was then Fixed at $1,151.25 down $20.75 and in the euro at €927.904 down €10.296, while the euro stood weaker at $1.2407. The volumes of net gold traded were two sellers selling 60,000 ounces and two buyers buying 46,000 ounces before the pro-rata process kicked in. Ahead of New York’s opening, gold was trading at $1,151.40 and in the euro at €927.91.

Silver Today – The silver price closed in New York at $15.56 down 18 cents. Ahead of New York’s opening it was trading at $15.57.

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

Silver _{(very short-term)} Silver will be hesitant to follow gold, in New York, today.

Price Drivers

In New York there were sellers of 1.794 tonnes of gold from the SPDR gold ETF but none from the Gold Trust on Monday. The holdings of the SPDR gold ETF were at 725.357 tonnes and in the Gold Trust at 160.42 tonnes. The selling from the SPDR fund continues but s prices fall, we expect these volumes to drop too. The pattern of selling is not consistent with a sole major holder selling gold. As prices failed to tackle overhead resistance the fall resumed which is likely to be a feature today. The euro too, has started to fall again by opening today at $1.2423 down half a cent on yesterday.

The APEC gathering in Beijing started its last day today. We have covered the rise of China and its gold demand persistently in our newsletter, but see this meeting as having a greater significance than the media portrays. With the widening of the use of the Yuan, a significant widening of China’s capital markets underway and the move of the Chinese economy to the world’s biggest, we see this meeting as an assertion of the growth of the ‘Chinese Empire’ and the chest beating that comes with it. While we are apolitical, China’s appetite for gold is deeply entrenched both in its developing monetary system and in the perceptions of the rapidly growing middle classes there. We expect the size of the Chinese middle classes to be somewhere north of 500 million in the decades to come. The implications for the gold and silver prices are tremendous.

The meeting also clarified that China is not aiming to fit into the current, global, financial architecture but to be able to control its own. We are reminded that nations don’t have friends, they have interests. China’s interests do not dovetail into those of the developed world. We believe it unavoidable now that gold will have a pivotal role in a future multi-currency monetary system. [Get the bigger picture - Subscribe to www.GoldForecaster.com & www.SilverForecaster.com – to protect against confiscation and penalties -see www.Stockbridgemgmt.com ]

Silver– Silver has fallen faster than gold and may hold close to current price levels while gold falls, today. www.SilverForecaster.com

Kind Regards,

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