Gold and silver recovering above $1,320

Gold TodayGold closed in New York at $1,325.60 on Friday after Thursday’s close at $1,313.30.  London opened at $1,327.

    • The $: € was weaker at $1.1165 down from $1.1182 Friday.
    • The dollar index was weaker at 95.65 from 95.79 Friday.
    • The Yen was slightly stronger at 103.28 from Friday’s 103.57 against the dollar.
    • The Yuan was slightly stronger at 6.6770 from 6.6823 Friday.

 

  • The Pound Sterling was stronger at $1.3328 from Friday’s $1.3267.

 

Yuan Gold Fix

Trade Date Contract Benchmark Price AM Benchmark Price PM
     2016  09  5

2016  09 2

SHAU

SHAU

284.84

282.69

285.24

282.50

Dollar equivalent @ $1: 6.6770

$1: 6.6823

$1,326.87

$1,315.81

$1,328.73

$1,314.93

Shanghai took the gold price higher by a small amount and London held it there at the open.

The Yuan was slightly stronger against the dollar which weakened slightly across the board. The pound continued to strengthen as you can see.

LBMA price setting:  The LBMA gold price setting on Monday was at $1,328.30. On Friday it was at set at $1,311.50.

The gold price in the euro was set on Monday at €1,189.91 up strongly on Friday’s 1,172.34.

New York is closed today but at the time New York usually opened, the gold price was trading at $1,327.10 and in the euro at €1,188.84.  At the same time, the silver price was trading at $19.48.

Silver Today –The silver price closed in New York at $19.39 up 52 cents, on Friday after $18.87 Thursday.  

Price Drivers

We wish those of our readers who are in the U.S. enjoy their holiday today, ready for a stronger gold market on their return. In our next issue of the Gold Forecaster we will discuss just what strategy will tremendously increase your returns in a time when gold prices are rising and just how to maximize returns, when it is not.

While New York is on holiday the jump in gold prices seen last Friday persists. The disappointing jobs report shook markets on Friday seemingly postponing a rate increase until the end of the year. Meanwhile the dollar continues to weaken against the major currencies, with the exception of the Japanese Yen.

There were no significant moves in the U.S. physical market showing that it is exchange rate moves which continue to affect gold and silver prices.

Meanwhile demand in India is on the rise as the gold and festival seasons begin. We keep seeing statistics for Indian demand related mainly to ‘official’ imports. We find these almost impossible to accept, because the Indian gold market is no longer dominated by ‘official’ imports.

Smuggling, three years ago, was thought to be at around 250 tonnes per annum on top of ‘official’ imports. Since then professional smugglers have improved efficiencies and market penetration. In addition the government has increased their profit margins by 1% by imposing a further Tax of that amount. During the gold manufacturer’s strikes, their front doors were closed and their back doors were open and manufacturing continued no doubt with the assistance of smuggled gold imports.

So when we see ‘official figures marked down and reports of dropping demand coming through we take these with a pinch of salt.

After a very good Monsoon, gold buyers are putting profits back into their pockets. With no tax payable on agricultural profits, much of those find their way into property and into gold as an ‘alternative’ financial system. It’s the Indian way of life resulting from many, many years of political corruption and bureaucratic abuse on the gold trade there.

So we would suggest that you add a minimum of 250 tonnes to the ‘official gold figures annually to see what the real annual Indian demand really is.

Gold ETFs – In New York Friday there were no sales from of purchases into the SPDR gold ETF but a small sale from the Gold Trust of 0.05 of a tonne leaving their respective holdings at 937.89 tonnes and 225.39 tonnes.

Since January 4th this year, the holdings of these two gold ETFs have risen by 364.165 tonnes.

Silver – The silver price jumped on the relatively small move in the gold price on Friday and this has carried through to London on Monday. A jump, of just under 3% in silver prices was seen while gold rose 1% on Friday.

Julian D.W. Phillips

GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance

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