Silver Market Morning

Gold Today –New York closed at $1,227.40 down $2.20 before Asia took it down to $1,223. The euro recovered nearly a cent to $1.2460. In London’s the gold Fixing was set at $1,219.50 down $8.75 and in the euro, at €980.936 down €10.948 while the euro was half a cent stronger at $1.2432. Ahead of New York’s opening gold was trading in London at $1,221.00 and in the euro at €981.24.

Silver Today – The silver price closed at $17.08 up 4 cents, in New York. Ahead of New York’s opening it was trading at $17.02.

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

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

Price Drivers

There were purchases of 2.988 tonnes of gold into the SPDR gold ETF but no sales or purchases into or from the Gold Trust on Tuesday. The holdings of the SPDR gold ETF are at 724.799 and at 162.37 tonnes in the Gold Trust. [Subscribe to www.GoldForecaster.com & www.SilverForecaster.com] This is the first strong buying at higher prices that we have seen for most of this year, but it is still too small to impact gold prices.

Asian demand, as we have said on many occasions, does not chase prices. So it will take some more time before Chinese buyers accept higher prices, but buy they will.

Indian buyers still see the current prices well below their Rupee peak of Rs.93,000 and have the added pressure of the next generation arriving, waiting for mothers to give them a dowry. As fathers well know, waiting for lower gold prices is not a stronger drive than the raised eyebrows of an impatient wife, so Indians will come into the gold market now, creating higher demand from India.

Add to this the continued restraint on the rise of the dollar from Treasury and we expect, after some more consolidation, higher prices. The euro has recovered close to the high in its trading band between $1.23 and $1.25 for no fundamental, or cogent reason, other than there were more buyers than sellers, but to us it is because a strong dollar is not wanted in the U.S. One advantage of lower oil prices is that nations that want their own currency to be weaker for international trade competitive reasons can now afford to let that happen without damaging their Balance of Payments. But this hurts the U.S. trade picture. So while the Technical picture on the dollar points to a nearly 20% rise in the dollar Index, we don’t see that as being permitted by the powers that be. To permit it would also hurt the structure of the monetary system we see today. That system is already weakening, before the biggest threat arrives, soon, in the form of a Yuan as a leading world currency.

Silver– The silver price is marking time now ahead of the next strong move in the gold price.www.SilverForecaster.com

Kind Regards,

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