U.S. Gold ETFs put on another 4.75 tonnes

Gold TodayGold closed in New York at $1,279.00 on Tuesday up from Monday’s $1,274.40. On Wednesday morning in Asia it held at $1,272.75, as most exchange rates were close to yesterday’s levels, except the euro.

LBMA price setting:  $1,270.90 barely up from Monday’s $1,270.10.

Yuan Gold Fix

Trade Date Contract Benchmark Price AM Benchmark Price PM
2016  05  18

2016  04  17

SHAU

SHAU

268.71

268.64

268.15

267.85

Dollar equivalent @ $1: 6.5540

+$1: 6.5475

$1,275.22

$1,276.16

$1,272.57

$1,272.40

No dominant influences can be read into these gold prices as they are trading in such a tight trading range. What is happening of note is that the dollar is stronger today and the Yuan weaker, while the gold price is acting as an effective measure of all currency values against itself.

The trading pattern of gold is eerily tight and has been this week to date. To us, the longer it moves sideways, the greater the subsequent move, either way.

The dollar index is almost unchanged at 94.83, up from yesterday’s 94.54. The dollar is also slightly stronger against the euro at $1.1275, stronger than Tuesday’s $1.1323.

The gold price in the euro was set at €1,126.47 up from Monday’s €1,121.70.

Ahead of New York’s opening, the gold price was trading at $1,274.15 and in the euro at €1,129.67.  

Silver Today –The silver price closed in New York on Tuesday at $17.23 higher than Monday’s $17.14. Ahead of New York’s opening the silver price stood at $17.07.

Price Drivers

Today saw a very heavy imposition of duties on steel imports to the U.S.A. It’s a game changer!

Take a look at the ‘currency wars’ that have taken place over the last couple of years. Now we see the dollar bull market has ended, to stem the loss of competitive advantage the dollar has. The background psyche is that nations don’t have friends they have interests. Globalization favors the cheap exports which undermine local industry. There is no tactic in exchange rates that can combat that. The only way to stop it is to impose duties of sufficient levels to remove the advantage to importers of cheap products. It is called ‘protectionism’. The steel import duties are a major step down this road. Expect protectionism to grow, globally.

Why is this important to gold and silver? Because it directly affects currencies and their exchangeability! Protectionism is divisive. Such division favors gold and silver.  In turn, this eventually, will affect global currency liquidity. This brings back the importance of gold as a global trade facilitator.

Gold ETFs – Tuesday saw purchases of 4.754 tonnes of gold bought into the SPDR gold ETF or the Gold Trust. This leaves their holdings at 855.886 and 198.38 tonnes in the SPDR & Gold Trust, respectively.  

Once again this is a large amount in a day, but once again COMEX and foreign exchange rates rule the day.

Silver –The Silver price continues to hold around $17.00 waiting for gold to move. Gold:silver ratio has risen to nearly 75 again

Julian D.W. Phillips

GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance

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