Silver Market Morning

Gold Today –New York closed at $1,274.60 down $9.70. In Asia gold held that level but ahead of London’s opening recovered to $1,284.70. At the Fix gold was set at $1,281.00 up $5.75 and in the euro, at €1,128.933 up €6.246, while the euro was barely changed at $1.1347. Ahead of New York’s opening gold was trading in London better, at $1,282.40 and in the euro at €1,129.92.

Silver Today – The silver price closed at $17.20 down 6 cents. Ahead of New York’s opening it was trading uncertainly at $17.65.

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

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

Price Drivers

There were purchases of 8.363 tonnes into the SPDR gold ETF but none into the Gold Trust on Monday. The holdings of the SPDR gold ETF remain at 766.735 and at 167.54 tonnes in the Gold Trust. Yesterday saw a large purchase of gold, indicating institutional activity, in the physical gold market. This was followed through on by Asian demand ahead of London’s opening.

Last week saw a jump in Chinese demand in the numbers reflected in withdrawals from the Shanghai Gold Exchange. These are now at 71 tonnes a week and may well become larger in the remaining days ahead of the Chinese New Year. Current Chinese demand is well ahead of the level of newly mined gold production.

The Greek Finance Minister is travelling in Europe and the U.K. to gather support to proposals from him for debt restructuring for Greece. At the moment, Germany remains intransigent on the very concept of re-negotiation. Until that concept is accepted across the Eurozone, it is premature to discuss the terms that may eventuate. While we do not expect any confrontations that rejects the negotiating process, the friction potential, particularly in the meeting with the German Finance Minister should prove intense, to say the least. We expect many dramas on the way to a renegotiated debt situation but do not expect them to cause any brutal falls in the euro, on that road. They will not have a direct impact on gold demand until finalized. [Subscribe to www.GoldForecaster.com & www.SilverForecaster.com].

Another look at the Swiss Franc shows that half of the strength it showed when it was ‘unpegged’ from the euro has been lost as it is being made to move against a basket of currencies including the dollar. In the ‘Swissy’, gold has recovered accordingly.

Silver– The silver price has a more stable, positive tone to it now. While it will become volatile again on the downside, we do expect it to move very strongly once gold is above $1,300. www.SilverForecaster.com

Regards,

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