Gold and Silver Market morning, January 16, 2013

Gold Today – Yesterday saw gold consolidate around $1,680 in New York and Asia with London opening at $1,679. Gold then Fixed at $1,679.75 and in the euro at €1,262.78 up over €3.The euro was slightly weaker at €1: $1.3327. Ahead of New York’s opening, gold was $1,678.90 and in the euro at €1,259.77.

Silver Today – Silver held steady overnight at $31.22 after yesterday’s $31.21, barely changed. Ahead of New York’s opening silver stood at $31.27.

Gold _{(very short-term)}

Gold is consolidating in a tightening range preceding a strong move, either way. This should continue to be the case in New York today.

Silver _{(very short-term)}

Silver is consolidating in a tightening range preceding a strong move, either way. This should continue to be the case in New York today.

Price Drivers

Gold & Silver – The report from the World Gold Council released on Friday of last week has not impacted whatsoever on the gold price and, by extension, the silver price, yet. We believe it is a significant piece of news that in time will change the whole shape of the gold market and its prospects. Likewise, the rise of China as a world economic power, totally independent of the developed world has not yet been factored into the future of gold. As we have said before, we expect China to become a, if not the, gold hub of the world. We envisage a day with four gold price Fixings, two in China and two in London making it a 24-hour gold market. Of course, this gives a solid picture of gold’s prospects for long-term investors, but will not impact the short-term traders and speculators who will remain fixated on the Technical scene. The long-term fundamental picture has not changed and remains positive, but short-term forecasters still emphasize either the downside or a continuation of the elongated consolidation. We would temper such forecasts by saying that the coming structural changes in the monetary world, such as described in this report. Despite the best efforts to introduce changes gently, so as not to undermine the foreign exchange values of reserves, the inevitable resultant changes in their values then or in the future, will shock markets into strong reactions.

It is clear that whether they arrive in 2013 or up to 2015, they will change the market and the gold price structurally and have a positive impact on the gold price. This impact, because of the importance of these changes, may well be discounted ahead of their arrival. [Subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com].

Silver – Silver’s robust price performance continues and favors the upside.

Regards,

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