Silver Market Morning

Gold Today –New York closed at $1,193.70 up $3.10. Asia held it at $1,192 before London opened, where it held that level up until the “LBMA Gold price” setting. It was set at $1,192.55 down $0.65 which was the euro equivalent of €1,085.57, down €1.18. Ahead of New York’s opening, gold was trading in London at $1,194.40 and in the euro at €1,087.55.

Silver Today – The silver price closed at $17.00 down 6 cents. Ahead of New York’s opening it was trading at $17.00.

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 no sales or purchases of gold from or to the SPDR gold ETF of or into or from the Gold Trust on Tuesday. The holdings of the SPDR gold ETF are at 744.401 tonnes and at 164.71 tonnes in the Gold Trust. We continue to expect consolidation below $1,200 but as the trading range narrows we await a strong move either way. Whether gold now breaks through this level or pulls back down is the question uppermost in gold & silver investor’s eyes.

The dollar is stabilizing with the dollar index dropping to 96.74. The euro is currently standing at $1.0989 as the Greek saga weighs on the euro. One of the hardest realities that creditor’s face when looking at a bankrupt debtor is the fact that it was unwise to have lent funds to him in the first place. The pragmatic way forward is to accept these realities and find a formula where the debtor can lift his head and start producing again and the bad debt eliminated in a ‘dust yourself off and start all over again’ situation. Unfortunately, when it comes to Sovereign debt no such formula exists, so the painful way forward must take place until realities are forced upon both creditor and debtor. The clock continues to tick on Greece until the end of April at the latest, but we expect pragmatism to bring that situation to a head before then. If there is a “Grexit” we see the euro strengthening!

Further to our comment of yesterday, it seems that the U.S. is going to oppose the Asian Infrastructure Investment Bank helping us to see the I.M.F. acceptance of the Chinese Yuan, in one of the S.D.R. currencies that make it up, may prove divisive.

At the same time the dominance of the U.S. over the voting structure of the I.M.F. where the U.S. has 16.83% of the votes and 85% of votes is needed before a resolution can be passed, will be under discussion. We doubt the U.S. will be happy to lose control of the I.M.F. explaining why the Chinese are prepared to go it alone. The world cannot afford to have a fragmentation of the monetary system, particularly while the global economy has a deflationary tendency. To gold investors such divisions are price-positive, long-term! [Subscribe through www.goldForecaster.com & www.SilverForecaster.com ]

Silver– The silver price is marking time waiting for gold to give it direction.

Regards,

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