Waiting for Yellen! Gold and Silver Marking Time

Gold TodayGold closed in New York at $1,239.40 up from $1,233.70 on Monday. On Tuesday morning in Asia and Europe it fell back to $1,233, before the LBMA price setting.

LBMA price setting:  $1,234.50 up from Monday’s $1,230.85.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM Benchmark Price PM
2016  04  26

2016  04  25

SHAU

SHAU

259.23

258.42

258.53

258.80

Dollar equivalent @ $1: 6.4942

$1: 6.4945

$1,241.56

$1,237.63

$1,238.21

$1,239.44

The dollar index is lower today, at 94.58 down from Monday’s 94.80. The dollar is barely changed against the euro at $1.1283 from Monday’s $1.1256.

The gold price in the euro was set at €1,094.12 down from Monday’s €1,093.51.

Ahead of New York’s opening, the gold price was trading at $1,233.05 and in the euro at €1,092.84.  

Silver Today –The silver price closed in New York slightly lower at S17.05 on Monday almost unchanged on Friday’s $17.03. Ahead of New York’s opening the silver price stood at $16.89.

Price Drivers

Today, the FOMC meets with little prospect if any, of a rate rise. The focus is on the statement that comes out of the meeting tomorrow. What we all are fully aware of is that the Fed does not want to see a stronger dollar. Indeed it would prefer to see a weaker dollar. Currently the policies of the E.U. and Japan, no matter what they say are designed to weaken their respective currencies.

We are expecting Mrs. Yellen to mention the Fed’s concerns about overseas factors that make the U.S. economy vulnerable to outside influences just as she did after the last meeting. These not only include China but the E.U. and Japan.

Of additional concern is yet another warning from the IMF pointing out that global risks are on the rise. Governments across the developed world are not boosting economies as they should be so the IMF is correct when they say that monetary policy can only do so much. Monetary policies were not designed to create growth and yet we have been helped to focus only on their efforts and almost ignoring the failure of government to do their job.

It’s like watching a man fall out of a 50-story building and hearing spectators saying as he passes each floor, “so far, so good!”

Needless to say, this is all positive for gold and silver prices.

Gold ETFs – Yesterday saw sales of 2.378 tonnes of gold from the SPDR gold ETF but no sales or purchases from or into the Gold Trust. This leaves their holdings at 802.654 and 187.56 tonnes in the SPDR & Gold Trust respectively.  These sales were sufficient to let dealers drop prices leaving the gold price at the bottom of its trading range.

Silver – The silver price is continuing to mark time at just below $17.00 while gold is lower.

Julian D.W. Phillips

GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance

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