Gold and Silver Market morning, September 07 2012

Gold Today –New York closed at $1,700.30. Asia pulled it back to $1,692 but London then pulled it up again to $1,695 early in London’s morning ahead of the Fixing. The euro rose in London’s morning to €1: $1.2674 up 0.6 of a cent. The gold price was Fixed at $1,696.00 and in the euro at €1,337.750. Ahead of New York’s opening gold stood at $1,695.46 and in the stronger euro at €1,335.85.

Silver Today – Silver continued to rise to $32.64 in New York but London took a more vigorous approach and lifted it to $32.87 ahead of the Fixing. Ahead of New York’s opening it stood at $32.27 in London.

Gold _{(very short-term)}

Gold should consolidate with a stronger bias, today in New York.

Silver _{(very short-term)}

Silver should hold steady but with a stronger bias, today in New York.

Price Drivers

Gold & Silver –Super, duper Mario did it for the euro, probably because he did something solid and definable, instead of the politicians dithering for so long. There is a clear and measurable commitment to support the weaker government’s bonds in the market place, to keep their interest rates down. The conditions attached are that they must ask for a bailout and in turn accept what they are told to do by the E.U. This is different from past efforts only in that the pre- or post-bailout negotiations have become orders from the E.U. It forces Spain to ask for help and to directly tackle regional governments and debt head-on. The question is, “Will Spain and Greece and potentially Italy bend to these conditions or not?” The global equity markets believe that this is what the doctor ordered and rose strongly. Gold paused, as expected. Will it rise with the euro still? [To follow our weekly commentary, please subscribe to our newsletters at www.GoldForecaster.com and www.SilverForecaster.com].

Meanwhile day to day Indian demand is weaker than seasonally expected. Record prices and the threat of more duty increases by the government seems to make new investors cautious. If these duties rise, expect smuggling to rise enormously as it has done in the past.

Silver – The remarkable performance of silver in the last week, not only reflects its strong fundamentals, but a steadiness free from volatility that one does not usually expect from silver. This tells us that it is a professional market, driven more by institutional interest looking for long-term investment positions than by the more capricious, retail side of the market. This is extremely positive for future price moves, we feel.

Regards,

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