Gold & Silver Market Morning

Gold Today – The New York gold price closed at $1,327.00 down $2.30 on Thursday in New York. Asia and London lifted it back to $1,338. The gold price was Fixed in London at $1,338.50 up $11.50. In the euro, it Fixed at €970.209 up €7.568 as the dollar weakened slightly to $1.3796 from $1.3760: €1. Ahead of the opening in New York gold stood at $1,340.55 and in the euro at €971.84.

Silver Today – The silver price closed at $20.29 down 28 cents in New York. Ahead of New York’s opening, it was trading at $20.50.

Gold (very short-term)

We expect the gold price to show a stronger bias, today in New York.

Silver (very short-term)

We expect the silver price to reflect show a stronger bias, in New York.

Price Drivers

Yesterday, there were no sales or purchases from or into the SPDR gold ETF. Their respective holdings remain at 812.776 tonnes and 166.14 tonnes. This clearly shows that the Fed’s new interest rate timetable has not affected positive U.S. investor’s views on gold started this year.

As we are now seeing the absence of such sales in the last two days shows the price fall lacked substance so we are seeing the gold and silver prices begin to recover. The financial markets of the world appear to have accepted the Fed’s statement and slowed the process of discounting next year’s interest rate increases. In line with this the dollar has begun to slip again from the last two days of strengthening. Or it could be that outflows of capital from the Treasury market [by foreign sellers of them] are overwhelming the ‘carry trade’s’ inflows. The days ahead will clarify this. Consequently, as the Fed’s announcements are digested we expect the gold and silver prices to resume the path they had before that announcement, upwards.

The appearance of the "Golden Cross", where the 50-day average crosses the 200-day average is an important signal confirming the resumption of the upward trend in gold. This will happen if the gold price holds above $1,300 in the near future. We signaled the turn at the bottom just below $1,200 as a double bottom. But many investors like to wait until they have solid confirmation of the change before they act. We see this as happening soon. Hence, we repeat, this fall remains a good entry point for us. [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]

We have an important question for all who read this report. Why do gold owners want to hold their gold outside their country? We believe that such people have not thought this through thoroughly enough and need to look again at this process. We will issue an article looking at just this point soon. With so much gold heading to the far reaches of the world we question whether investors are really achieving the security they think they are.

Silver – The silver price is expected to rise faster than gold in the next few weeks.

Regards,