Gold and silver looking for direction

Gold TodayNew York closed yesterday at $1,327.00 yesterday.  London opened at $1,333.00.

    • The $: € was slightly weaker at $1.1232: €1 down from $1.1219: €1 yesterday.
    • The Dollar index was stronger at 95.30 from 94.40 yesterday.
    • The Yen was stronger at 102.18: $1 up from 102.08: $1 yesterday against the dollar.
    • The Yuan was slightly weaker at 6.6800: $1 from 6.6808: $1 yesterday.

 

  • The Pound Sterling was weaker at $1.3263: £1 from yesterday’s $1.3297: £1.

 

Yuan Gold Fix

Trade Date Contract Benchmark Price AM Benchmark Price PM
     2016  09  13

     2016  09  12

SHAU

SHAU

286.64

285.53

286.14

286.04

Dollar equivalent @ $1: 6.6800

$1: 6.6808

$1,334.66

$1,329.33

$1,332.33

$1,331.70

Shanghai went $6 higher than New York and London followed this price at the opening before pulling back to New York’s close at the LBMA price setting. We are watching to see if this is the start of pricing in Shanghai separating itself from New York. London’s pricing seems to respect Shanghai and could be asking the same question.

We are seeing China stabilizing as the throes of developing an internal economy pull this way and that. The government appears to have an iron grip on the economy which also appears to be following the course it wants. The benefit for gold is that is middle classes continue to grow steadily. They continue to have affection for gold and will continue to do so for the foreseeable future.

LBMA price setting:  The LBMA gold price setting on Monday was at $1,328.50. Yesterday it was at set at $1,327.50.

The gold price in the euro was set at €1,182.26 against yesterday’s €1,183.05.

Ahead of the opening of New York the gold price was trading at $1,325.90 and in the euro at €1,179.89.  At the same time, the silver price was trading at $19.09.

Silver Today –The silver price was lifted to $19.13 at New York’s close yesterday up from $19.07, Monday.  

Price Drivers

Yesterday, another Fed spokesperson spoke on the market obsession of when a rate hike is to occur. She encouraged prudence and caution on when this might happen. This has been read that a hike in September is not going to happen even though it is to be discussed. The markets now react to any person involved in the FOMC committee. This does not make forward guidance a bit ridiculous as it is market reaction that is at fault. To us this is a reflection of the myopic nature of markets which do not seem to look at the facts but at the emotion involved with feeling in the Fed member’s statements.

The wise understand as much as is involved as possible and then take their positions. Otherwise it would be simply reacting to gossip. Traders make money and lose money this way, but investors make money understanding the fundamentals and the structure of markets.  

Gold ETFs – There were no sales or purchases from or into the SPDR or Gold Trust yesterday, leaving their respective holdings at 939.940 tonnes and 225.39 tonnes.

Silver – Like gold, the silver price appears unwilling to fall through support, at $19 in silver’s case,  for any length of time. Silver will follow gold and neither its Technical picture nor its fundamentals, a pattern set some years ago. It is still being treated as a monetary metal and has been throughout those years.

Julian D.W. Phillips GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance

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