Gold and silver prices in positive run

Gold TodayGold closed in New York at $1,353.30 on Monday after Friday’s close at $1,353.30.  

    • The $: € was down at $1.1197 from $1.1175.
    • The dollar index fell to 95.42 from 95.64 Monday.
    • The Yen was stronger at 101.69 from Monday’s 102.20 against the dollar.
    • The Yuan was stronger at 6.6358 from 6.6415 Monday.

 

  • The Pound Sterling was stronger at $1.3231 up from Monday’s $1.3179.

 

Yuan Gold Fix

Trade Date Contract Benchmark Price AM Benchmark Price PM
2016  08  2

2016  08  1

SHAU

SHAU

288.69

288.65

289.32

287.95

Dollar equivalent @ $1: 6.6358

$1: 6.6415

$1,353.15

$1,351.84

$1,356.11

$1,348.53

Shanghai prices took New York’s close higher still and London even higher.

We are seeing the Yuan strengthen against the U.S. dollar but staying in line with other currencies. The People’s Bank of China is not focused on the dollar but on the broad basket of currencies of its trading partners. The PBoC wants a stable to weakening Yuan and that despite what level the dollar will reach at some point this year.

We previously mentioned that the Yuan would weaken against the dollar to bring it into line with other global currencies against which the dollar had risen. But now that the dollar itself is weakening we are lowering our sights on where the Yuan will be by year’s end. We see it stronger than 7.00 to the dollar [weaker means more Yuan to the dollar] by year’s end.

LBMA price setting:  $1,358.15 after Monday 1st August’s $1,348.85.

The gold price in the euro was set at €1,212.63 up €4.42 from Monday’s €1,208.21.

Ahead of the opening in New York the gold price stood at $1,357.50 and in the euro at €1,212.81.  

Silver Today –The silver price closed in New York at $20.43 on Monday up from $20.34 on Friday.  Ahead of New York’s opening the price was trading at $20.68.

Price Drivers

Ahead of Thursday’s expected rate cut in the U.K. [and likely more QE] we have the announcement from the Japanese government we expected to come and mentioned yesterday. $273 Billion worth of stimuli! The details will follow. And yet we are seeing the Yen continuing to strengthen towards 100 and possibly lower in the days ahead.

It is clear that the Bank of Japan has come to the end of its road and that the government must step up to the plate now. Its demographics are against it as is the age of its population. Disinclined to spend and focussed on less spending, not more, as it ages, the population will not run out to support growth. The Abe government seems to be facing an intractable situation, worse than, but similar to, many other countries in the developed world.

After years of efforts to combat deflation, many now believe that the current round of stimuli will not change the picture of the deflating Japanese economy.

Gold ETFs – In New York on Monday there were purchases of 5.937 tonnes bought into the SPDR gold ETF (GLD) and a purchase of 0.51 of a tonne into the Gold Trust (IAU) leaving their holdings at 964.032 tonnes and 219.70 tonnes, respectively.

The U.S. buying of physical gold via the U.S. based gold ETFs has begun again in earnest. If it continues at this rate gold and silver prices will move through overhead resistance!

Since January 4th this year, the holdings of these two gold ETFs have risen by 386.117 tonnes.

Silver –Silver prices are consolidating alongside gold and at the same pace today. Tomorrow may see it resume its characteristic vigor. The market has a positive tone.

Julian D.W. Phillips

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

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