A Trump Presidency would be positive for gold and silver

Gold TodayGold closed in New York at $1,333.10 on Thursday after Wednesday’s close at $1,319.30.  

    • The $: € was barely changed at $1.1028 down from $1.1029.
    • The dollar index fell to 97.01 from 97.00 Thursday.
    • The Yen was slightly stronger at 106.21 from Wednesday’s 107.02 against the dollar.
    • The Yuan was stronger at 6.6722 from 6.6742 Thursday.

 

  • The Pound Sterling was weaker at $1.3184 down from Wednesday’s $1.3254.

 

Yuan Gold Fix

Trade Date Contract Benchmark Price AM Benchmark Price PM
2016  07  22

2016  07  21

SHAU

SHAU

285.37

282.87

284.88

282.96

Dollar equivalent @ $1: 6.6722

$1: 6.6742

$1,330.30

$1,318.25

$1,328.01

$1,318.67

Shanghai prices were slightly less than at New York’s close, while London tried to pull prices lower at the opening.

The main bullion banks can arbitrage positions using the funds they have in all centers. Likewise the ICBC, the main Chinese bullion bank in China and a gold market maker in London can do the same, buying and selling gold without moving it across borders. This is acceptable to the Chinese monetary authorities as it involves a large use of Renminbi [Yuan] internationally.

Consequently, we are seeing the gold price smoothed out across the world. So a conclusion that can be drawn is that gold prices are in sync globally.

Nevertheless, this does not mean that there is a globally liquid gold market reflecting gold’s demand and supply. Traders and speculators continue to dominate prices, while physical gold continues to express a very different market sentiment as it moves into U.S. gold ETFs and across to Asia.  At some point in the future the two different markets will come together in a most dramatic way.

LBMA price setting:  $1,322.00 the same as Thursday 21st July’s $1,322.00.

The gold price in the euro was set at €1,198.98 down €1.10 from Thursday’s €1,200.08.

Ahead of the opening in New York the gold price stood at $1,325.05 and in the euro at €1,202.84.  

Silver Today –The silver price closed in New York at $19.85 on Thursday up from $19.61 on Wednesday.  Ahead of New York’s opening the price was trading at $19.68.

Price Drivers

Last night’s acceptance speech from Donald Trump was of significance to gold and silver prices should he become President.

Many believe he stands little chance of becoming President, just as the vast majority of Americans did not think he had a chance of becoming the Republican Presidential nominee when the selection process began. So the chances of him becoming President are more than a possibility. His message is pertinent.

He intends following a policy of what is clearly protectionism and a move away from globalization. This will not only be negative for growth, but disruptive and divisive for the global economy.

As it is, the global monetary system is marching determinedly to a multi-currency system. A President Trump will rapidly accelerate this process. The need for gold in ‘Official’ hands will grow in such an environment to smooth out the ruptures in cash flows between nations across the world.

Silver is likely to rapidly increase its pace towards a recognized monetary metal in that environment too.

A President Trump would be gold & silver price positive!

Gold ETFs – In New York on Thursday there were sales of 2.079 tonnes of gold from the SPDR gold ETF, leaving their holdings at 963.142 tonnes and purchases of 0.6 of a tonne into the Gold Trust, leaving their holdings at 217.54 tonnes.

Since January 4th this year, the holdings of these two gold ETFs have risen by 383.091 tonnes.

Silver –Silver prices continue to fall, relative to gold.

Julian D.W. Phillips

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

 

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