Gold & Silver Market Morning, March 29 2012

New York closed at $1,663.10 down $18 and then Asia held it close to that level at $1,662. London then Fixed it at $1,655.75 down $22 and in the euro at €1,245.862 down €10 while the euro stood at €1: $1.3290. Ahead of New York’s opening it stood at $1,657.00 and in the euro €1,247.65 while the euro was at €1: $1.3281.

Silver fell back to $32.05 in New York, down $1 on yesterday. Ahead of New York’s opening it stood at $31.87.

Gold _{(very short-term)}

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

Silver _{(very short-term)}

Silver will again consolidate, with a stronger bias, in New York today.

Price Drivers

While Indian demand remains hostage to the Indian Jeweler’s strike still, Chinese demand is strong and making up the shortfall. [To follow our weekly commentary on the Chinese and Indian gold markets, please subscribe to our newsletters at www.GoldForecaster.com and at www.SilverForecaster.com.]

All global markets are flip flopping up and down as they focus on the slightest nuance of the remarks from Fed Chairman Ben Bernanke and their interpretation. World markets are being driven almost entirely by short-term traders at the moment, including the gold and silver markets. There is a marked tendency by these traders, on the one hand, to read the most optimistic hopes into realities and to a lesser extent other traders reading the worst possible interpretation into realities. It took the Fed Chairman to read the correct interpretation into the current realities by confirming that the U.S. economy has not gained convincing traction yet. Its trade partners to whom it exports [20% into Europe] are in recession and half the world’s population in the emerging world are able to produce goods as well and cheaper. This will continuously make it difficult for the U.S. recovery to do well. Until the U.S. consumer is happy to spend again we do not see the recovery as convincing. This means the housing sector must be rising, employment security firm and consumer’s perceptions that these elements are sustainable. Until then uncertainty will rule and the risk of a systemic fracture very much on the cards. This remains gold positive.

Meanwhile, across the globe in the emerging world the opposite remains gold positive. Economic growth right down to rural India remains healthy. Farmers there continue to invest in gold as a lifelong investment. The jeweler’s strike there is causing a build-up of demand for both gold and silver, which will not go away. Despite this gold remains volatile but essentially firm still. Once Indian demand rejoins the fray we may see added impetus to the gold and silver prices.

With BRICS nations meeting today to attempt to lessen their dependence on developed world financial systems we are seeing a real start to emerging world financial independence, an unstoppable process. This is also gold positive.

Regards,

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