Could we see strong gold demand continue in H2?

Gold TodayGold closed in New York at $1,346.70 on Wednesday after Tuesday’s close at $1,340.60.  London opened at $1,346.

    • The $: € was barely changed at $1.1144 from $1.1146.
    • The dollar index fell to 95.82 from 95.82 Wednesday.
    • The Yen was stronger at 101.28 from Wednesday’s 101.84 against the dollar.
    • The Yuan was stronger at 6.6406 from 6.64 Wednesday.

 

  • The Pound Sterling was weaker at $1.2958 up from Wednesday’s $1.3050.

 

Yuan Gold Fix

Trade Date Contract Benchmark Price AM Benchmark Price PM
2016  08  11

2016  08  10

SHAU

SHAU

287.34

288.63

287.36

289.47

Dollar equivalent @ $1: 6.6406

$1: 6.6400

$1,345.85

$1,352.02

$1,345.95

$1,355.95

All three chief global gold markets were in line in the last day. Looking at the Technical picture, we see that the gold price is showing a ‘quiet before the storm’.

The gold and silver markets are no place for the cautious now. Even a small bit of gold related news will trigger a strong move. Question is, “Which Way will it go”.

LBMA price setting:  $1,344.55 after Wednesday 10th August’s $1,351.85.

The gold price in the euro was set at €1,206.20 down €3.79 from Wednesday’s €1,209.98.

Ahead of the opening in New York the gold price stood at $1,345.45 and in the euro at €1,206.47.  

Silver Today –The silver price closed in New York at $20.17 on Wednesday up from $19.85 on Tuesday.  Ahead of New York’s opening the price was trading at $20.16.

Price Drivers

The most positive news today for gold and silver is the rapid approach of the “Gold Season” in September.

  • At this point the summer holidays for the developed world are coming to an end and the focus in the gold market is for jewelry producers to buy for the festive season at the end of the year.
  • In India, after falling to the lowest in seven years in the first half, demand for gold is certain to rise because of the excellent monsoon rains achieved this year since May continuing into September. This will boost rural demand during the festive season, starting in September.
  • In China, the expectation of a lower Yuan is broadcast in the Chinese media, encouraging growing demand in line with internal trends we mentioned in earlier newsletters from the Gold Forecaster.
  • In the last quarter of the year we expect U.S. demand for physical gold from investors in the shares of their Exchange Traded Funds to continue steadily.

     So far in 2016 investment demand for gold has overtaken the previous-ever high of 917 tonnes in 2009 [First half]  to reach 1,064 tonnes.

Gold ETFs – In New York on Wednesday there were no sales or purchases to or from the SPDR gold ETF (GLD) or the Gold Trust (IAU). This left their respective holdings at 972.618 tonnes and 221.24 tonnes.

Since January 4th this year, the holdings of these two gold ETFs have risen by 396.243 tonnes.

Silver –Silver prices jumped back to over $20 in the last day and will hold and move strongly when we see the strong move, either way, which we now expect from gold prices.

Julian D.W. Phillips

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

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