Silver Market Morning

Gold Today – The gold price closed down at $1,165.80 up by $16.20 in New York on Tuesday. It then moved up slightly to $1,169 before London’s opening. It was Fixed at $1,163.25 up $12.00 and in the euro at €934.412 up €6.508, while the euro stood stronger at $1.2450. The volumes of net gold traded were two sellers selling 22,000 ounces and two buyers buying 42,000 ounces before the pro-rata process kicked in. Ahead of New York’s opening, gold was trading at $1,163.60 and in the euro at €934.21.

Silver Today – The silver price closed in New York at $15.74 up 18 cents. Ahead of New York’s opening it was trading at $15.67.

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

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

Price Drivers

In New York there were sellers of 0.897 tonnes of gold from the SPDR gold ETF but none from the Gold Trust on Tuesday. The holdings of the SPDR gold ETF were at 724.46 tonnes and in the Gold Trust at 160.42 tonnes. Gold lending rates have gone negative, which is often followed by a price rise. The euro is also stronger today at $1.2488 up half a cent on yesterday.

One of the reasons why it is so important to have a global view of precious metal markets is to be able to discern a credible media report from one lacking credibility. The recent report, that sanctions on Russia imposed by the U.S. and Europe have forced the Russian central bank to buy its own gold production because its own banks can’t sell it into the western gold markets is one of these. – Yes, in the back of Russia’s mind is the possibility that the U.S. could prevent Russia from using its dollar reserves. Commercial banks are fully aware that they have the power to punish banks that go against U.S. foreign policy as we saw in the case of BNP Parisbas earlier in the year. While there are no sanctions on handling Russian gold we would expect Russia itself to take steps to sell their gold direct to Chinese banks, likely in return for Yuan in the event of such a blockade.

We have long believed that Russia would buy local production for their reserves rather than sell their gold overseas only to go overseas to then buy gold for their reserves.

Of all nations, Russia is the most likely to act to protect their gold and foreign exchange reserves from the dangers of holding them close to U.S. influence. The recent steps to get closer to China, we believe, is part of a long road ahead as Russia not only protects it own interests through diversification of both trade and reserves into Asia, but by ensuring it has a choice of customers for its own goods. What is more pertinent to the gold price is that around 240 tonnes of gold annually will not go through the developed world markets as it used to do, reducing net supply levels. China’s gold production does not reach these markets either, that involves 430 tonnes. [Get the bigger picture - Subscribe to www.GoldForecaster.com & www.SilverForecaster.com – to protect against confiscation and penalties -see www.Stockbridgemgmt.com ]

Silver– Silver will follow gold today as usual.www.SilverForecaster.com

Kind Regards,

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