Gold Today – Gold closed in New York at $1,591.60 and in London’s early morning fell to $1,558 before climbing back to $1,575 60. The Fixing in London today was set at $1,576.00 down $30 on yesterday’s p.m. Fix. In the euro it was set at €1,264.340 down €13 on yesterday’s p.m. Fix. Ahead of New York’s opening gold stood at $1,580.40 and in the euro, €1,266.14 while the euro was at €1: $1.2482. [To follow our weekly commentary, please subscribe to our newsletters at www.GoldForecaster.com and at www.SilverForecaster.com.].

Silver Today – Silver fell back in New York to $28.61 before falling back to $28.20 in London’s morning. Ahead of New York’s opening at $28.25.

Gold _{(very short-term)}

Gold may well show a positive bias, today in New York.

Silver _{(very short-term)}

Silver may well show a positive bias, today in New York.

Price Drivers

Gold – The COMEX Futures and options markets in New York, combined with dealing in physical gold, when the market is quiet, leaves the gold price in the hands of speculators and traders. They just want movement, no matter which way it is. With gold sitting up so far after the last jump, traders read that it was vulnerable to downward pressure yesterday and went for it, trampling on the price. It is always wise to close short positions and get back into the market after such a fall, so do not be surprised if that’s what happens today.

What Ben Bernanke did not say about more QE was not enough to make the gold price fall like this. After all he is wary of a E.U. crisis crossing the Atlantic and will do whatever is necessary in the interests of the U.S. to prevent such a deflation hitting U.S. markets. This does not exclude more QE.

Another issue being taken as gold negative is the lowering of growth rates in China. At a projected 8.2% we take an alternative view. We feel that the need for the pace of economic growth to keep at these high levels is to keep creating more middle classes. These people invest in gold. The middle classes already created, don’t buy gold, ‘once off’ but keep buying as their wealth accumulates. While China may show symptoms that would stumble a U.S. economy, the system of government has such a control over growth and money that at the very worst any slowing of growth there will be a ‘soft landing’.

Silver – Silver gave up ground yesterday as it followed gold, but remains robust at these levels.

Regards,

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