The Chinese hold their gold reserves through their people

Gold TodayNew York closed yesterday at $1,337.50 yesterday.  London opened at $1,335.80.

    • The $: € was slightly weaker at $1.1271 down from $1.1267 yesterday.
    • The Dollar index was stronger at 94.94 from 94.78 yesterday.
    • The Yen was weaker at 102.12 down from 101.62 yesterday against the dollar.
    • The Yuan was weaker at 6.6798 from 6.6640 yesterday.

 

  • The Pound Sterling was weaker at $1.3297 from yesterday’s $1.3348.

 

Yuan Gold Fix

Trade Date Contract Benchmark Price AM Benchmark Price PM
     2016  09  9

     2016  09  8

SHAU

SHAU

287.79

289.20

287.75

289.35

Dollar equivalent @ $1: 6.6798

$1: 6.6640

$1,340.05

$1,349.81

$1,339.86

$1,350.51

Shanghai was roughly in line with New York’s close and London slipping a little lower.

When it comes to measuring either the increase in Chinese gold reserves or the gold imports to China we must say that the information provided by the Chinese is only what they want us to know. With last month’s announcement of a 5 tonne increase in official gold reserves we read into it that they want all to know they are continuing to increase their reserves but not at a visibly aggressive rate. There are several ways they can increase their reserves but not take them onto their books, ‘officially’.

We remind readers that they “own gold through their people”. That includes all gold currently inside their borders but primarily directly through state controlled institutions.

LBMA price setting:  The LBMA gold price setting on Friday was at $1,335.65. Yesterday it was at set at $1,348.00.

The gold price in the euro was set on Friday at €1,185.61 against yesterday’s 1,194.08.

Ahead of the opening of New York the gold price was trading at $1,336.55 and in the euro at €1,188.20.  At the same time, the silver price was trading at $19.48.

Silver Today –The silver price was pulled back to $19.62 at New York’s close down from $19.78, yesterday.  

Price Drivers

Yesterday did not see any purchases of gold into the gold ETFs and a small sale. As a result the gold price slipped back a little. All was quiet on the currency fronts leaving both silver and gold to mark time today. Physical demand of good sizes drives the gold price with dealers translating gold prices in line with exchange rate movements.

Gold ETFs – There was a small sale of 1.187 tonnes from the SPDR gold ETF but no change in the holdings of the Gold Trust, leaving their respective holdings at 951.811 tonnes and 225.39 tonnes.

Silver – The silver price followed gold lower to close at $19.62 yesterday and will be sensitive  to gold slippage.

Julian D.W. Phillips

GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance

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