Gold and silver to hold their prices, and currencies fall against them.

Gold TodayGold closed in New York at $1,318.90 up from $1,257.50 on Friday a rise of $51.40.  Before the opening in London the gold price rose further to over $1,332, before pulling back to $1,325 after the market opened.

  • The $: € plunged lower on Monday morning to $1.1004 from [pre-Brexit] Thursday’s $1.1336.
  • The dollar index moved higher to 96.37 up from the pre-Brexit, 93.48.
  • The Yen continues to strengthen [101.70] after central bank indicated it may well intervene to weaken the Yen.
  • The Yuan continues to weaken to 6.65 respectively. The Yuan fix showed the Chinese authorities are taking pulling the Yuan down more in line with the euro than the dollar.
  • The dollar is strong on the Index so we do expect action to weaken the dollar even if it is just through swaps. The Fed expressed their worries at their last statement, so we doubt they will tolerate such strength.

Yuan Gold Fix

Trade Date Contract Benchmark Price AM Benchmark Price PM
2016  06  27

2016  06  24

SHAU

SHAU

283.36

270.42

283.43

278.92

Dollar equivalent @ $1: 6.6412

$1: 6.6236

$1,325.41

$1,269.85

$1,327.42

$1,309.77

With the Yuan now being pulled down by the authorities in China,  we expect the Yuan price of gold to rise faster, as the Yuan falls.

Gold is rising against all currencies describing the real weakness of all currencies, even though the dollar is the least weak of them.

The positive Technical picture continues to promise higher prices.  

LBMA price setting:  $1,324.60 up from Friday 24th June’s $1,313.85.

The gold price in the euro was set at €1,200.96 up €14.00 from Friday’s €1,186.96.

Ahead of New York’s opening, the gold price was trading at $1,329.75 and in the euro at €1,208.53.  

Silver Today –The silver price closed in New York on Friday at $17.72 up from Thursday’s $17.33 a rise of 39 cents. Ahead of New York’s opening the silver price stood at $17.76.

Price Drivers

We are informed by the Chancellor of the Exchequer in Britain that he communicated with the G-7 leaders over the weekend and that their objective is to ‘calm’ markets and we have not seen any “gapping” [brutal sudden drops in values] yet.

His efforts will be focused on slowing down the process of divorce from the E.U.  in an attempt to minimize disruptions. All nations want calm, but all nations care for their own interests before those of others, so their efforts will not detract from their interests, leaving the fundamental problems of major structural proportions [much bigger than 2008] ahead of them. Let’s put it this way:

The huge earthquake has happened and tsunamis are on their way! Governments [who, to date, have not shown either the will or competence to resolve the problems that arose in 2008] are now building walls to minimize the impact of these.  They are on the defensive, without direction. Gold and silver will hold their prices, and currencies will fall against them.

Governments are braced for major banking crises with vast sums of newly printed money, which again will devalue those currencies against gold and silver!

The B.I.S. continues to warn of crises, this time pointing at the unsatisfactory way Sovereign debt is treated on balance sheets. In short, while the banks are well shored up with new capital and central banks are prepared to put new money into the monetary tide walls, the massive debt burden may well add to the tsunamis approaching. If governments are so concerned, so should we be!

Please note that all data that we receive from the global economy is pre-Brexit, so will not be indicative of the future state of global economies. Uncertainty rules the day!

Gold ETFs – On Thursday the holdings of the SPDR & gold Trust jumped 18.415 to a holding of 934.313 tonnes and the holdings of the Gold Trust remained the same at 201.91 tonnes.

Since January 4th this year, the holdings of these two gold ETFs have risen 339.437 tonnes.

Silver –Silver prices are ready to go full pelt, even against gold prices!

Julian D.W. Phillips

GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance

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