Silver through resistance and gold preparing to run higher

Gold TodayGold closed in New York at $1,343.70 on Friday after Thursday’s $1,323.70.  In Asia the gold price again jumped higher and London was trying to pull the gold price lower just after its opening.  

  • The $: € slipped to $1.1124 up from $1.1152.
  • The dollar index moved lower to 95.73 from 95.89 Friday
  • The Yen was unchanged at 102.65.
  • The Yuan was weakening to 6.6663 from 6.6572 on Friday.

Yuan Gold Fix

Trade Date Contract Benchmark Price AM Benchmark Price PM
2016  07  4

2016  07  1

SHAU

SHAU

290.07

284.54

290.01

285.50

Dollar equivalent @ $1: 6.660

$1: 6.6572

$1,354.68

$1,329.42

$1,354.40

$1,333.90

Shanghai took the lead again ahead of London’s opening, as the perspective on the global economy continued to point to more deflation and national monetary policies targeted more easing.

The Yuan continues to weaken, as you can see above, against the U.S. dollar. The dollar itself continues to weaken against the euro as a result of behind the scenes activity. We see this as more than just protecting the U.S. economy, but a stabilizer in the foreign exchange world itself. The Pound appears to be stabilizing now too.

LBMA price setting:  $1,348.75 up from Friday 1st July’s $1,331.75.

The gold price in the euro was set at €1,211.60 up €12.40 from Friday’s €1,199.20.

With New York closed for Independence Day, the gold price in London’s afternoon was trading at $1,350.70 and in the euro at €1,212.80.  

Silver Today –The silver price closed in New York on Friday at $19.70 almost a dollar higher than Thursday’s $18.26. In London’s afternoon the silver price stood at $20.18.

Price Drivers

With New York closed today, our audience is either those whose interests/positions demand they keep in touch or in countries where business is as usual. All of us are slightly open mouthed at the strong rises in both gold and in particular silver, of late. It is a good opportunity to reflect on the global ‘big’ picture. In summary this points to a solid, rising second half of the year for both gold and silver prices.

The prime reasons for the rises are that both their Technical pictures have moved out of the consolidation area into ‘new territory’. Silver’s breakout is clearer than gold’s at this moment.

Over the coming weeks and months the ramifications of ‘Brexit’ on the global economy will give us a measure of just how much of a tectonic shift in the world economy it was. The most visible impact has been a lowering of the expectations for interest rates and the heightened economic risks to the world.  The risk factor pulls markets down and the low interest rates should push both bond and equity markets up. That mix is expressing itself in market levels now. But equity market rises are not for the right reasons. The future is not improving economically, quite the reverse, so markets are rising [where they are doing so in the world] because of better yield offerings. Most agree that the future of the global economy is extremely worrying, which is why gold and silver are gaining more and more momentum. This is a trend change from the last three years in precious metals and will not reverse until we see some of the last eight year’s hopes become realities. This is unlikely!

A growing fear is now becoming that deflation’s grip will grow in a world where the capacity and competence of the governments and central banks is insufficient to combat the downturn in the developed world. The current efforts are focused on undermining currencies, which is showing itself in currencies weakening against gold.

Gold ETFs – On Friday the holdings of the SPDR gold ETF jumped another 3.86 tonnes leaving their holdings at 953.914 tonnes and the holdings of the Gold Trust remained the same as the day before, leaving its holdings at 208.17 tonnes.

Since January 4th this year, the holdings of these two gold ETFs have risen 365.298 tonnes. According to Bloomberg, the total increase in ETF gold holdings is over 500 tonnes. This far exceeds expectations of central bank’s purchases for the entire 2016.

Silver –Silver prices have burst through overhead resistance and sees little if any resistance to rises for some way.

Julian D.W. Phillips

GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance [Gold Storage geared to avoid its confiscation]

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