Brexit vote Day – All quiet on the ‘Western Front’ for now

Gold TodayGold closed in New York at $1,266.20 up $0.30 on Wednesday ahead of the start of voting in Britain.  Asia took it up to $1,270 and London let it slip a dollar and a half, despite strong demand for physical gold in the U.S.

The $: € moved lower to $1.1336 from Wednesday’s $1.1271. The dollar index moved to 93.48 down from 93.89. It is a day when the dollar is weaker in the world’s main currencies, but the Yuan was weaker too.

Yuan Gold Fix

Trade Date Contract Benchmark Price AM Benchmark Price PM
2016  06  23

2016  06  22

SHAU

SHAU

267.96

269.81

268.66

268.00

Dollar equivalent @ $1: 6.5797

$1: 6.5886

$1,266.70

$1,273.72

$1,270.01

$1,265.17

While the Yuan weakened against the dollar, the gold price in Shanghai was slightly stronger than New York, which led the way for London to follow. This showed clearly the small change in direction was due to the influence of Shanghai showing a measure of pricing power.

Gold prices worldwide are ‘on hold’ pending tomorrow’s result in Britain, after which we will see strong movements.

We believe that a ‘stay in’ vote has been discounted in global financial markets, to some extent.

At the moment, the positive Technical picture remains unchanged. We don’t expect any change, subject to tomorrow’s vote.

LBMA price setting:  $1,265.75 up from Wednesday 22nd June’s $1,265.00.

The gold price in the euro was set at €1,110.21 down from Wednesday’s €1,119.96.

Ahead of New York’s opening, the gold price was trading at $1,261.25 and in the euro at €1,110.60.  

Silver Today –The silver price closed in New York on Wednesday at $17.27 from Tuesday’s $17.23 a rise of 4 cents. Ahead of New York’s opening the silver price stood at $17.31.

Price Drivers

We have to be careful to not see the referendum in the U.K. as the ‘be all and end all’ in the global economy today. There are many other issues going on in other parts of the world.

The dollar is a weaker today, a factor totally unrelated to the British referendum. The news out of the E.U. from France is that manufacturing continues to fall into a contractionary state.

Repeat: The Pound Sterling continues 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 – The holdings of the SPDR Gold ETF (GLD) rose another 3.564 tonnes as the physical buying continued at a fast pace, leaving its holdings at 915.898 tonnes. The Gold Trust (IAU) saw no action yesterday and its holdings remain at 201.91 tonnes.  

Since January 4th this year, the holdings of these two gold ETFs alone have risen 321.022 tonnes. Silver –Silver prices are stronger over yesterday’s price at $17.41 but remain and now wait for the vote to be announced tomorrow morning.

Julian D.W. Phillips

GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance

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