On Thursday New York closed at $1,089.30 up $4.30. The dollar is barely changed at $1.0911, with the dollar Index the same at 97.90. This morning the LBMA gold price was set at $1,091.35 up $6.35. The euro equivalent was €997.76 up €2.44. Ahead of New York’s opening, gold was trading in London above $1,091.20 and in the euro at €997.62.
The silver price closed at $14.65 up 5 cent in New York. Ahead of New York’s opening it was trading at $14.73.
There were no sales from the SPDR gold ETF but 0.75 of a tonne from the Gold Trust on Thursday. The holdings of the SPDR gold ETF are at 667.934 tonnes and 161.83 tonnes in the Gold Trust. With so little sold from these gold ETFs the gold price floated higher, close to $1,100 before pulling back in London’s morning.
Today, Friday, has become a big day in the gold world. With the jobs report due out today any number over 230,000 is likely to take the dollar stronger and be negative for gold.
Friday is also the day of the week when the ongoing bear raid, that has lasted for three weeks so far, makes its biggest hit, normally at the close of business in New York, selling large tonnages of physical metal from the SPDR gold ETF which is then arbitraged by the GLD’s Custodian, HSBC across into Shanghai on Monday morning.
Initially such an operation slammed the gold price down, but in the last two weeks these tonnages have been taken off the market before they could impact the gold price. So it appeared China’s demand was affecting the gold price directly in arbitrage operations, a very important structural change for the global gold market. But is that so?
If the jobs report [and wage growth] is strong, we would not be surprised to see a large tonnage unloaded into China from the SPDR gold ETF today too. If the last two weeks is anything to go by, this tonnage may be taken off the market in Shanghai’s morning. How will we know?
If the gold price on Monday does not fall in Shanghai, then arbitrage operations into Shanghai will have become efficient and we will see a more global gold price.