Silver Market Morning

September 20, 2012

Gold Today –New York closed down at $1,770.50 the same as yesterday. Asia and London took it down to $1,762. London Fixed the gold price at $1,760.00 down$14.50 and in the euro at €1,360.334. The euro weakened slightly $1.2943, down half a cent. Ahead of New York’s opening gold stood at $1,758.72 and in the euro at €1,358.77.

Silver Today – Silver was slightly down [17 cents], to $34.61. Ahead of New York’s opening it stood at $34.22.

Gold _{(very short-term)}

Gold should consolidate with a stronger bias, today in New York.

Silver _{(very short-term)}

Silver should consolidate with a stronger bias, today in New York.

Price Drivers

Gold & Silver – It’s back to the daily drama the Eurozone crisis, where Spain is gambling that the markets will provide funding for it. Rajoy, the Spanish Prime Minister is doing all he can not to go for a bailout from the E.U. Investors made it clear that he has succeeded, today. But he may have to pay more and the market’s willingness to fund Spain is waning. Spain’s Balance of Payments is now in balance and so the economy is stabilizing, but government finances require urgent attention. So it is a matter of time before politicians have to bow to the purse.

Financial markets around the world have overcome the euphoria of the global quantitative easing and slipped back. Is this merely a small correction or are they unconvinced that it will change things? If it is seen as another inadequate gesture, then we feel that it will send a message that monetary easing is not enough to promote growth. Governmental action in the main trade blocs of the world is what’s required. Consequently, it will simply serve to promote inflation. We must wait and see. The difference this time will be that if it does fail to promote growth then it will be too late to stem the negative consequences it engenders. Whether inflation or deflation follows, for gold and silver investors, becomes irrelevant as either will serve to elevate their prices. [To follow our weekly commentary, please subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com]