Gold Today – The gold price consolidation is becoming a fierce battle below $1,400 with New York closing around $1,367. But in Asia and particularly London the gold price was lifted above $1,393 to Fix in London’s morning at $1,386.00 up $0.75 on yesterday’s Fixing and in the euro at €1,074.919 up €5.5, while the euro was slightly changed at €1: $1.2894 down 36 cents against the U.S. dollar. Ahead of New York’s opening it stood at $1,389.00 and in the euro at €1,077.87.

Silver Today – Silver closed at $22.43, in New York yesterday. Ahead of New York’s opening silver stood at $22.45 not reacting to the jumping around of gold.

Gold _{(very short-term)}

The gold price should continue to consolidate below $1,400, in New York today.

Silver _{(very short-term)}

The silver price will follow gold, with a steady bias, in New York today.

Price Drivers

Gold & Silver – The SPDR gold ETF saw sales on Wednesday of 5.777 tonnes making 23.08 tonnes sold this week so far from the SPDR gold ETF. The selling knocked the price back in New York towards $1,367 but when London opened the gold price sprang up again to $1,393, demonstrating the outflow from the U.S. gold ETF and the inflows into the east. The total held in the SPDR gold ETF could well fall below 1,000 tonnes next week. So, one has to look at two factors present among the holders of gold in this fund. The first is, “How many holders are exiting totally from their positions” and secondly, “How many will act like Paulson and ride out this stage in the market for gold, in the U.S.” If we could assess this information accurately, simple arithmetic would tell us when the selling will stop. At this point, downward pressure on the gold price would stop and we would then see the robust demand from Asia take over.

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Meanwhile markets and the media are reading their desire to see higher equity markets into Mr. Ben Bernanke’s words, by concluding QE is set to slow soon. What he actually said was,

“A premature tightening of monetary policy could lead interest rates to rise temporarily but would also carry a substantial risk of slowing or ending the economic recovery and causing inflation to fall further. If we see continued improvement, and we have confidence that that is going to be sustained, in the next few meetings we could take a step down in our pace of purchases. We could either raise or lower our pace of purchases going forward. Again, that is dependent on the data.” As you can see he left it open to guidance from future data to point to even raising the pace of QE as well as diminishing it. But when markets want good or bad news they read such statements to suit their viewpoint. This leaves markets in a state of flux, volatile and capricious.

Silver – The silver price is now back to a steady bias, unlikely to track the current volatility in gold, until a clear direction is given.

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

Global Gold & Silver Prices
	CAD	EUR	GPB	JPY	CHF	USD
Silver	23.17	17.36	14.86	2,274.72	21.68	22.40
Gold	1,435.42	1,075.33	920.82	140,926.93	1,343.14	1,387.80

May 23, 2013 09:02:34 EST