Gold & Silver Market Morning

Gold Today – The New York gold price closed at $1,311.80 up $2.30 on Tuesday in New York. Asia and London lifted it again to $1,315. The gold price was Fixed in London at $1,314.50 down $0.25. In the euro, it Fixed at €952.743 up €0.922 as the dollar stood at $1.3800 up from $1.3813: €1. Ahead of the opening in New York gold stood at $1,315.20 and in the euro at €953.18.

Silver Today – The silver price closed at $20.00 up 2 cents in New York. Ahead of New York’s opening, it was trading at $20.09.

Gold (very short-term)

We expect the gold price to consolidate at around current levels today, in New York.

Silver (very short-term)

We expect the silver price to consolidate at around current levels today, in New York.

Price Drivers

The European Central Bank is contemplating turning to quantitative Easing and taking interest rates down to negative in an attempt to stave off deflation, at last! It is expressed by them as ‘tackling too low inflation’ but the correct translation of this is to ‘stave off deflation’. After so long, it is about time that such actions were taken. This is very gold positive, as it signals that the next crisis really is one of creating growth in Europe. But let’s be clear on this, if deflation has arrived it will now take a very long time to defeat it. Had this been done 5 years ago the Eurozone would likely have been growing in a healthy way.

On Monday, we saw a sale of 2.697 tonnes from the SPDR gold ETF but none from the Gold Trust. Their respective holdings are now at 818.770 tonnes and 166.14 tonnes. We expect such sales as the gold price moves up from time to time because a two-way market ensures the price reflects true demand and supply. The sales had no impact on the gold price. In this fund, while we believe the greater bulk of potential sellers have sold, there must be those holding out for a better price and will sell as the gold price rises. But the bulk of the current holders are mainly those holding for the long term, realizing the risks facing currencies and the world’s monetary systems.

While the gold price appeared to have found a ‘bottom’ we need a few more days to see if this is so. We continue to feel the fall has been overdone. If this is correct the next rise could well be substantial, according to the Technical picture. Before that happens we must climb over the month end. This is a time when major institutions like to try to force the gold price down to protect their options and futures positions. If the gold price can hold or rise in the next week, we should see that rise. [For more on this, subscribe to www.GoldForecaster.com and www.SilverForecaster.com and visit www.StockbridgeMgMt.com to hold gold out of reach of potential confiscation]

Silver – The silver price is now cautiously following the gold price waiting for gold to move higher.

Regards,