Silver Market Morning

Gold Today –New York closed at $1,225.10 down $2.30 before Asia took it down to $1,220. The euro fell over half a cent to $1.2395. In London’s the gold Fixing was set at $1,223.50 up $4.00 and in the euro, at €984.31 up €3.374 while the euro was unchanged at $1.2430. Ahead of New York’s opening gold was trading in London at $1,225.00 and in the euro at €982.79.

Silver Today – The silver price closed at $17.05 down 3 cents, in New York. Ahead of New York’s opening it was trading at $17.15.

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

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

Price Drivers

There were purchases of 0.949 tonnes of gold into the SPDR gold ETF and sales of 0.27 of a tonnes of gold from the Gold Trust on Thursday. The holdings of the SPDR gold ETF are at 725.748 and at 162.10 tonnes in the Gold Trust. [Subscribe to www.GoldForecaster.com & www.SilverForecaster.com]

The gold market remains in consolidation mode with Asian investors waiting to see if they can buy again closer to $1,200 of if they must pay up at these levels. U.S. investors are waiting to see if prices are going to rise again in which case they must continue short covering. If prices continue to hold around these levels both will then react. As the trading pattern in this consolidation narrows, we are moving to a point where we will see a strong reaction. Friday is always the busiest day for gold as investors contemplate that unless they act today they must hold for three days before they can deal again.

One issue now off the table is the potential closure of government in the U.S., which last time caused a credit downgrade of the U.S. With the government voting to finance government until September 2015, other issue now present themselves in the gold market.

We do not now believe that the dollar will climb much further despite the Technical picture saying it will. It should in the light of the Eurozone governments disagreeing on the way forward still. The E.U. government structure is now dysfunctional leaving Draghi and the E.C.B. out on a limb. He will do his best to start Q.E. there but without overall government support he risks damaging the euro, fundamentally, without producing true economic growth. This situation reinforces our view that deflation is imminent in the E.U. with the euro losing a significant amount of credibility.

Meanwhile oil is testing the $60 level and looks like there’s a big fall still coming!

Silver– The silver price will follow gold today.www.SilverForecaster.com

Kind Regards,

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