Gold Today –Gold closed slightly weaker at $1,287.40 down $29.80 in New York on Friday. Asia let it slip $2 then London came in and took it to $1,282 ahead of the Fix where it was set at $1,383.74 in London, down $25.26 on Friday’s Fixing. In the euro it Fixed at €957.808 down €17.0 on Friday’s Fixing. Ahead of New York’s opening the euro strengthened to $1.3398: €1 with gold at $1,286.40 and in the euro at €960.14.

Silver Today – Silver rose to $21.45 down 33cents in New York on Friday. Ahead of New York’s opening it traded at $21.40.

Gold _{(very short-term)}

The gold price will look for a floor in New York, today.

Silver _{(very short-term)}

The silver price will look for a floor in New York, today.

Price Drivers

The SPDR gold ETF saw no sales or purchases on Friday in the SPDR gold ETF but a purchase of 1.21 tonnes into the Gold Trust holdings, leaving their holdings at 868.418 tonnes and 172.21 tonnes. This confirms that the fall in the gold price on Friday was the result of the strengthening of the U.S. dollar and in a thin market. We do expect the market to be volatile as these moves were caused by so little activity. If the market continues to be thin, prices could jump quickly, either way, on small volumes.

With the dollar now at $1.3398 against Friday’s $1.3419 today, the market is still digesting the surprising drop in Eurozone growth and fall of 0.25% in the key Eurozone interest rate now at 0.25%. As we come to the end of the year, we wonder if the Eurozone is managing to hold onto growth or has it slipped back into recession? In the southern part of the Eurozone the economic situation continues to be alarming with France now joining the economic malaise. The internal strains arising from the different levels of growth between north and south have seen a major shift in capital and resources to the north at the expense of the south. These strains are structural and point to crises that will favour gold long-term.

In China the government is laying the next 5 to 10 year plans. We note their continued favoring of gold accumulation. When we reflect on their last set of 5 to 10 year plans we are struck not only by their success but the ability of that government to control all aspects of their economy. The subjection and support of government plans by their population has produced remarkable results to date and so should continue to do so in the next decade. In short, we expect the next decade to see the hub of the gold market move to China and for volatility to lower and for the upward trend to continue. While we see the Yuan become a leading reserve currency, we do not see an appreciation of the Yuan exchange rate of great significance despite the demand for it. [Find out more from www.GoldForecaster.com and www.SilverForecaster.com to subscribe to our newsletters and visit www.StockbridgeMgMt.com to hold gold so it can’t be seized]  

Silver – The silver price should continue to move with the gold price but with less volatility.

Regards,

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