Gold Today –New York closed at $1,272.70 up $2.50 on Monday. Asia held it there ahead of London’s opening. At the Fix, gold was set at $1,255.50 down $21.25. In the euro it Fixed at €929.487 down €12. Ahead of New York’s opening gold stood at $1,255.50 and in the euro at €929.24.

Silver Today – Silver closed at $21.26 down 3 cents on Monday. Ahead of New York’s opening it traded at $20.73.

Gold _{(very short-term)}

The gold price should be weaker today, in New York.

Silver _{(very short-term)}

The silver price should be weaker today, in New York.

Price Drivers

Gold & Silver – 2 days left before ‘D-Day’....................

We note that this story is not being reported as vigorously today. President Obama tells us a default is likely, but we are told, again, a deal is about to be announced. As you know gold has not had a default premium and is not being held up or down by the prospect of default. 

The main influence at the moment is major U.S. banks and clients selling huge amounts in a short time in a way designed to break the gold price down. Add to this that supplies to China are not sufficient to remove the premium, now $17 over the price of an ounce of gold and you have a well-managed market. There is no good reason why there should be any premium whatsoever in China, but clearly slow delivery acts as a block on demand reaching the global market. The situation begs a lot of questions!  Indian demand is being blocked by government measures, so taking record demand out of the equation too. The premium over the price of an ounce of gold there is $40. Blocking the two main sources of demand for gold and leaving it in the hands of bear raiders is bound to have a negative impact on the price of gold.

But it is only a matter of time before Chinese demand reaches the market and impacts the gold price. It’s like the string of a bow being pulled back adding to the momentum gold will have on the rise.

The lower the price goes the greater the demand and the less the supply of newly mined gold will be. Indian demand will also get through too, as individuals take the illegal route to gold. With elections next year, we expect politicians to open the doors to gold before then.

Later we saw small sales from the SPDR gold ETF holdings of 1.846 tonnes which now stands at 889.132 tonnes and the holdings of the Gold Trust remained unchanged at 175.41 tonnes.

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The week will remain volatile.

Silver – The silver price will also be very volatile this week.

Regards,

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