Gold and Silver Market morning, December 12, 2012

Gold Today –New York closed at $1,710.00 up $1 on yesterday. This morning, Asian dealers took it higher after which London followed through to take it to $1,715. It then Fixed at $1,712.50 up $2.75 on yesterday. In the euro it was Fixed at €1,315.587 down €2.5 while the euro was slightly stronger at €1: $1.3017. Ahead of New York’s opening, gold was $1,714.35 and in the euro at €1,314.38.

Silver Today – Silver closed a touch lower at $32.95 in New York yesterday. In Asia and London, silver held rose to $33.17, but slipped slightly to $33.14, where it stood ahead of New York’s opening.

Gold _{(very short-term)}

Gold is expected to show a stronger bias, in New York today.

Silver _{(very short-term)}

Silver is expected to show a stronger bias, in New York today.

Price Drivers

Gold & Silver – again the markets are discounting more quantitative easing from the Fed as they announce their decisions after two days of deliberation. Once an economy has turned the corner, rather like a massive oil tanker it needs a boost to generate the momentum that takes it to a higher level than when it was turning. With the Eurozone numbers expected to disappoint and China’s growth not really, directly helping the West [as it drains wealth and power from the West] the developed world is becoming critically reliant on the U.S.A. for a way out from the recessions that are deepening.

The U.S.A. may ‘catch a break’ from its oil production as this increases. At the present rate of growth of oil production U.S. oil prices could well tumble to $50 to $60 in the next couple of years. In an attempt to hold oil prices up outside the U.S.A. up, Saudi Arabia is cutting oil production to its lowest level in a year. We expect more of this as foreign access to U.S. oil may prove difficult. We do expect the U.S. oil market to be made to benefit from its rising production and lower prices. After all it has a twin effect, that of lowering total costs of everybody and increasing profits as well as lowering the Trade balance of the U.S. considerably. This is important considering that the U.S. is embarking on a course of far greater self-sufficiency than it has seen in 40 years. Will this protect the U.S. dollar from the diminishing role it plays as the sole global reserve currency? We must wait and see. .The downside to this is that the increased availability of the extra dollars in the economy will add the the Q.E. we are experiencing now. This is gold positive. [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com]

Silver – Silver is vigorous in defending the $33 level and may shortly advance from it. Longer-term a more robust U.S. economy will add to industrial demand for silver, but the demand from investors will also increase for many other reasons too.

Regards,

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