Gold & Silver Market Morning, April 10 2012

While New York took the gold price back up to $1,641.30 on Easter Monday it was India’s return to the market that lifted it up from $1,618.3 over the weekend. Overnight Asia lifted it up a further $7 to $1,648.70 ahead of London’s opening today. The euro dropped from €1: $1.3150 to €1: $1.3082 while this was happening. Today, gold Fixed it at $1,643.75 up $22 and in the euro at €1,255.921 up €15 while the euro stood at €1: $1.3088 barely changed from Friday. Ahead of New York’s opening it stood at $1,644.20 and in the euro €1,257.47 while the euro was at €1: $1.3075.

Silver fell back to $31.71 down from $32.22 down a dollar. Ahead of New York’s opening it stood at $31.57.

Gold _{(very short-term)}

Gold will consolidate and try to rise, in New York today.

Silver _{(very short-term)}

Silver will consolidate and try to rise, in New York today.

Price Drivers

With the Indian jewelers strike now over, the pent-up demand it caused, started to show itself in international prices over the weekend. Likewise with Chinese holidays out of the way we expect today to show the full demand from Asia. Bear in mind that they see prices in their own currencies and not in the U.S. dollar or euro and are unlikely to react to any relatively minor western news.

What will have added impetus to gold demand is more evidence of rising inflation in China. The Chinese and Indian people do not have the same trust in government-issued money as evidenced by inflation. In India it ‘appears’ now that the government will again back down from imposing higher taxes on gold imports because of public pressure.

In India the government has voiced an opinion that gold is not healthy for their economy so try, superficially, to discourage gold investors, while in China the government is fully supportive of its citizens buying gold. Indeed, it outlaws the export of gold. We are of the opinion that the Chinese central bank, the People’s Bank of China, through an outside agency are continuously acquiring gold locally and to some extent from the world market for the purpose of increasing the gold content of their enormous reserves. This is not ‘visible’ because it is not in the interests of paying a market related price to disclose these purchases for fear of driving prices up. [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.] We have begun to issue articles on the future of gold in the global monetary system and comment on the Gold Standard. It is a five part series which subscribers will get in full. Parts of them only will be issued to the public. We believe that there will be considerable changes in the shape of the global monetary system, which may even split in two and drastically re-rate the value of the dollar on world currency markets.

Regards,

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