Gold and silver prices still base building

Gold TodayGold closed in New York at $1,332.30 on Tuesday after Monday’s close at $1,329.30.  

    • The $: € rose to $1.1002 down from $1.1058.
    • The dollar index rose to 97.12 from 96.77 Tuesday.
    • The Yen was slightly weaker at 106.48 from Tuesday’s 106.11 against the dollar.
    • The Yuan was stronger at 6.6785 from 6.6920 Tuesday.

 

  • The Pound Sterling was weaker at $1.3178 down from Tuesday’s $1.3167.

 

Yuan Gold Fix

Shanghai prices were not available on site today.

The People’s Bank of China stepped into the Yuan market today and strengthened the currency as you can see above.

We continue to expect the Yuan to weaken down to 7.00 to the U.S. dollar by year’s end.

Bear in mind that with all the competitive devaluations across the world the dollar’s strength also meant the Yuan’s strength when it was around 6.2 to the dollar. China has not been devaluing against the dollar but is now trying not to be strong with it.

The fall in the Yuan is being engineered cautiously and without attracting too much attention. So far it has succeeded. Perhaps the PB of C is now trying to slow the fall so as to stay in the shadows.

LBMA price setting:  $1,325.60 down from Tuesday 19th July’s $1,332.20.

The gold price in the euro was set at €1,204.00 down €0.74 from Tuesday’s €1,204.74.

Ahead of the opening in New York the gold price stood at $1,323.75 and in the euro at €1,202.21.  

Silver Today –The silver price closed in New York at $20.00 on Tuesday down from $20.07 on Monday.  Ahead of New York’s opening the price was trading at $19.74.

Price Drivers

With tomorrow’s European Central Bank meeting gold and silver prices are trying to mark time in a poor Technical environment.

Most expect the E.C.B. to do nothing, but the pressure is mounting heavily for more easing.

The euro remains relatively strong and the economic outlook for the E.U. remains tilted to the downside. The potential for a recession is there. So something must be done.

Yes, most are worrying that there is insufficient post-Brexit data to go on, but the need for more easing is very clear. So while most do not believe Draghi will do anything, we expect action!

Such action will precipitate a fall in the euro, the E.U. hopes, but as we have said many times before, the U.S. cannot afford to see a dollar rise through the 100 level on the dollar index.

Gold ETFs – In New York on Tuesday there were no purchases into the SPDR gold ETF, but there were purchases of 0.60 of a tonne into the Gold Trust, leaving their holdings at 965.221 tonnes and at 216.94 tonnes respectively.

Since January 4th this year, the holdings of these two gold ETFs have risen by 384.57 tonnes.

Silver –Silver prices are falling strongly, relative to gold, mainly on ‘marking down’ by dealers.

Julian D.W. Phillips

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

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