Silver Market Morning

Gold Today –New York closed at $1,168.50 down $4.00. Asia and London took it down to $1,164. The dollar was 0.75 of a cent stronger at $1.1054 and the dollar Index was higher at 96.37 after being 95.70. The LBMA gold price was set this morning at $1,164.30 down $7.40. The euro equivalent was €1,051.00 down €6.73. Ahead of New York’s opening, gold was trading in London at $1,162.60 and in the euro at €1,050.18.

Silver Today – The silver price fell to $15.59 down 13 cent in New York. Ahead of New York’s opening it was trading at $15.60.

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

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

Price Drivers

The media continues to feast on Greece’s drama but the markets remain unmoved until the way forward is clear, one way or the other. What is of more importance is the sight of so many currencies struggling against a stronger dollar now. In Indonesia the use of the dollar for internal trade has been halted as the local currency sinks. Puerto Rico’s debt problem, the Ukraine and many others are stumbling, as is a waning global economy. While trade competitiveness improves for these countries, most are not reaping the benefits of rising exports. We still see pressure within the U.S. Treasury to hold the dollar back, but foreign exchange pressures are mounting on the dollar. What history shows is that market intervention fails against a fundamentally weakening or strengthening currency. With the dollar the ‘tree trunk’ of the currency system it is no surprise that the branches are withering first. The most important exchange rate in the monetary world is the $: €. The E.C.B. wants the euro weaker, the U.S. doesn’t, so where next? With the Jobs report on the way, will it be sufficiently positive to send the dollar stronger?

The gold and silver prices continue to drift down on low volumes, belying the true picture of demand and supply. With western markets dominating the gold and silver prices, ignoring the fundamentals of both metals it is pertinent to ask why should their prices rise in the future? We would answer; that there is no reason, unless this structure changes. After all, for the last 45 years the developed world has disliked gold as money insisting that it has been replaced by paper currencies, particularly the dollar. To date this view has worked, irrespective of the fact that when this change started gold was at $42 and ounce and is now, after a nearly 50% fall is at $1,160 nearly 28 times higher. The question is, will this dollar dominance continue in the future? The rise of China and its separate monetary system, one that is being structured to weather currency storms and clearly not dependent on the dollar in the near future, is giving us the answer. For more - Subscribe www.goldForecaster.com

On Tuesday there were no sales or purchases from or into the SPDR gold ETF, or the Gold Trust. The holdings of the SPDR gold ETF are at 711.439 tonnes and at 167.79 tonnes in the Gold Trust.

Silver– Silver is leading the way down for gold in a thin speculator dominated market. Subscribe www.SilverForecaster.com

Regards,

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