Gold and Silver's Daily Review for 28th October 2010


With the dollar continuing to be the focal point of the markets, gold has quietened down slightly higher in London at $1,334.

In London's morning it was Fixed at $1,326.50.   With no new news to affect the gold and silver prices exchange rate management is easier.   The dollar remains at $1,3825, the Yen at 81.28 and the Swiss Franc at 9850 to the U.S. Dollar.

Further to our mention of CFTC statements that market players have made "repeated" and "fraudulent efforts to persuade and deviously control" silver prices, we have received reports that HSBC Holdings Plc and JPMorgan Chase & Co. are facing an investor's lawsuit of placing "spoof" trading orders to manipulate silver futures and options prices in violation of U.S. antitrust law.   The investor, Peter Laskaris, alleges that starting in March 2008, the banks colluded to suppress silver futures so that call options, or the right to buy, would decline, and put options for the right to sell would increase, according to the complaint filed yesterday in federal court in Manhattan. The collusion was also intended to maintain prices at levels at which some options would expire as worthless.  We are waiting for the outcome.

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Gold – Very Short-term As part of the consolidation process today, the gold price should rise within its trading range.

Silver – Very Short-term As part of the consolidation process today, the gold price should rise within its trading range.

Gold Price Drivers

We should not underestimate the impact of the cry of 'foul' by Mr. Chilton a CFTC Commissioner in the silver market.   Don't be surprised if you hear the same cry in the gold market soon.   If pursued to the extent justice demands not only will the practice be stopped but positions supporting that practice closed.   This could well see prices jump as it is believed that the aim of such fraudsters has been to keep silver and gold prices artificially low.   Most such practices, it is believed were short-term in nature and not capable of holding prices down long-term.   Hence the rises in the precious metal prices in the last few years.   It is possible that we could see prices readjust upwards in the near future as legal action is initiated against the players.

We will be writing an article on the gold price since 1971 to now to highlight why the rise since 2000 is part of that long-term picture. To receive it subscribe to Gold Forecaster.

We expect to see rising volatility, uncertainty and general stress levels to begin rising across the world from now on.   This will likely become an ongoing feature of the investment world.


Julian D.W. Phillips