Gold robust in the Euro

The New York gold price closed Wednesday at $1,101.20 up from $1,087.20 up $14. In Asia on Thursday, it was lifted to over $1,103.75 before London opened and then was set by the LBMA at $1,097.65 up from $1,096.80 with the dollar index higher at 99.31 up from 99.03 on Thursday. The euro was down at $1.0824 from $1.0901 against the dollar. The gold price in the euro was set at €1,014.09 up from €1,006.15. Ahead of New York’s opening, the gold price was trading at $1,097.70 and in the euro at €1,014.14.  

The silver price in New York closed at $14.15 up 12 cents at Thursday’s close.  Ahead of New York’s opening, the silver price stood at $14.13.

Price Drivers

‘Frantic Friday’, the busiest day of the week for gold and silver! After the equity market dramas of this week and the volatility seen so far in 2016, today may be more frantic than usual. While gold did break up through $1,100 it was pulled back in New York on no volume once again. Once again, dealer’s marking down prices in markets reflects the fear that equity market sales or the search for liquidity to cover margin calls will spill over into the gold and silver markets. This fear will pass [it should not take months, but days or a few weeks].

In the euro, gold is making a strong showing and in the dollar, simply making small adjustments on the basis of the dollar exchange rate, of little significance.

Thursday saw purchases of 1.785 tonnes into the SPDR gold ETF and a purchase of 0.36 of a tonne into the Gold Trust. The holdings of the SPDR gold ETF are now at 662.089 tonnes and at 161.82 tonnes in the Gold Trust. The battle of $1,100 continues but it does look more like the gold price will rise.

With a small rally going on in the oil markets and global equities the sounds of relief are a little too loud for us to think any bottom has been found. With markets moving like waves on the sea shore, next week may well see more falls.

The statement from Mario Draghi of the E.C.B. hinted at more stimuli at the next ECB meeting but nothing happened at this one. We see equity markets, after digesting his comments, showing disappointment at him. The restraint on the dollar ‘bull’ market remains in position as it holds below 100 on the dollar index and still within the $: € exchange rate trading band of the last few weeks between $1.07 – $1.10.

The reasons for the falls in global equities remain in position and will do so for a long time to come. Liquidity in markets is also proving a problem adding to the volatility across the world.

Silver is continues to be robust and waiting for gold to rise.

Julian D.W. Phillips for the Gold & Silver Forecasters www.goldforecaster.com and www.silverforecaster.com

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