Last day before Brexit vote and gold ETFs still adding metal

Gold Today –Gold closed in New York at $1,265.90 down $24.20 on Tuesday as a “Bremain” position is taken in global financial markets.  Asia took it down to $1,265 too and London held it around that level, despite strong demand for physical gold in the U.S.

The $: € moved lower to $1.1271 from Tuesday’s $1.1341. The dollar index moved to 93.89 up from 93.46.

Yuan Gold Fix

Trade Date Contract Benchmark Price AM Benchmark Price PM
2016  06  22

2016  06  21







Dollar equivalent @ $1: 6.5886

$1: 6.5818





New York, Shanghai and London have decided that $1,265 is the dealer’s consensus on the gold price and will wait for the vote tomorrow before they move one way or the other. We are getting the impression that Shanghai [under the control of the People’s Bank of China] does not want the price there to move out of line with either New York or London. There may well be a day when they change their minds, but we can’t expect that before September when the Yuan is an active part of the Special Drawing Right of the I.M.F.

The expected volatility this week will only reappear after the announcement of the British Referendum result.

At the moment, the positive Technical picture has not changed despite yesterday’s fall. We don’t expect any change, subject to tomorrow’s vote.

LBMA price setting:  $1,265.00 down from Tuesday 21st June’s $1,280.80.

The gold price in the euro was set at €1,119.96 down from Friday’s €1,129.45.

Ahead of New York’s opening, the gold price was trading at $1,265.40 and in the euro at €1,120.72.


Silver Today –The silver price closed in New York on Tuesday at $17.23 down from Monday’s $17.50 a fall of 27 cents. Ahead of New York’s opening the silver price stood at $17.24.

Price Drivers

The dollar is a little stronger today, tempered by Mrs. Yellen’s remarks yesterday in front of Congress. She clarified that the British referendum is a significant event that may well affect the U.S. economy. World financial markets are moving as if the referendum is a significant event. It took just one person’s death in 1914 to start World War 1. Will this event trigger events in the financial world as great, or greater, than 2008’ “Credit Crunch”. It would seem so!

The financial world wants a ‘Bremain’ result not a ‘Brexit’ and is discounting it to some extent. This means that a ‘Brexit’ result will cause tremendous turmoil in global markets while a ‘Bremain’ result may provoke a wobble but not turmoil. The polls show the vote still, as ‘too close to call’.

As we said yesterday, “Friday therefore promises to not only be a volatile day, but an historic one.”

The Pound Sterling continues to sit at very strong levels! If the vote is to leave, expect a heavily plunging pound!

Currencies and precious metals are in gambler’s territory as the polls look pretty even!

Gold ETFs – On Friday the holdings of the SPDR & gold Trust rose another 3.546 tonnes as the physical buying picked up its pace, into the gold ETF, leaving its holdings at 912.334. Another 0.45 of a tonne of gold bullion were added to the Gold Trust, leaving their holding at 201.91 tonnes.

Since January 4th this year, the holdings of these two gold ETFs have risen 317.458 tonnes.

Silver –Silver prices are steady and holding ahead of the vote tomorrow but remain within reach of $17.30 and now wait for the vote to be announced at 7.00a.m. tomorrow morning.

Julian D.W. Phillips | | StockBridge Management Alliance


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