Gold and silver holding near support

Gold TodayNew York closed at $1,322.90 yesterday after the previous close of $1,327.20.  London opened at $1,321.65.

    • The $: € was weaker at $1.1223: €1 from $1.1201: €1 yesterday.
    • The Dollar index was weaker at 95.45 from 95.63 yesterday.
    • The Yen was weaker at 101.56: $1 up from 100.76: $1 yesterday against the dollar.
    • The Yuan was weaker at 6.6734: $1 from 6.6708: $1 yesterday.

 

  • The Pound Sterling was stronger at $1.3024: £1 from yesterday’s $1.2992: £1.

 

Yuan Gold Fix

Trade Date Contract Benchmark Price AM Benchmark Price PM
     2016  09  29

     2016  09  28

SHAU

SHAU

285.01

284.86

284.40

285.02

Dollar equivalent @ $1: 6.6734

$1: 6.6708

$1,328.38

$1,328.20

$1,325.54

$1,328.94

New York and Shanghai were in line with each other but, once again London took gold prices down slightly despite the dollar proving a little weaker.

LBMA price setting:  The LBMA gold price setting was at $1,320.85 against yesterday’s $1,324.80.

The gold price in the euro was set at €1,177.39 against yesterday’s €1,181.33.

Ahead of the opening of New York the gold price was trading at $1,320.10 and in the euro at €1,176.45.  At the same time, the silver price was trading again at $19.06.

Silver Today –The silver price rose slightly to $19.16 at New York’s close yesterday down from $19.14, Monday.  

Price Drivers

Today comes the news of an “agreement” between OPEC members on cutting oil production. We do have problems with the statement:

  1. OPEC members in the past, when they have made “agreement” have usually disregarded them straight away. This is understood in the oil market.
  2. Non-OPEC members that supply 50 million barrels a day of the 82 million barrels a day, have yet to come in line, if they do.
  3. U.S. oil production will climb the moment they reach break-even point, undermining the impact of a between 200,000 and 700,000 barrels a day production cuts globally. Will a President Trump impose duties to ensure U.S. production is bought first in the U.S. before imported oil to protect that industry?
  4. The “agreement” must wait until November before being signed.

Consequently, while the oil price rose a few dollars, few take the agreement to be a reality, but simply an intention at best.

The gold price is holding above support on no ETF purchases or sales and yet moved slightly by exchange rate moves on the dollar.

The future of the monetary system – To clarify the point we made yesterday about turpitude in the banking system, while so many global banks are using behavior that borders, if not crosses, into criminal activity, we have absolutely no doubt that governments around the world will continue to rely completely on them as the veins and arteries of the global economy.

With the Fed now looking into their behavior [do we expect strong action? – No] it is clear that alternatives to the monetary system will always pose a threat to the banking system and as such will be vilified.

Here we are talking not just about gold and silver, but cash itself too.

We see in India, institutional turpitude over a few generations has spawned an alternative financial system base on gold property and cash. This is deeply ingrained and will remain so in future generations.

It is ironic that central bankers continue to hold huge stocks of gold as they fear the same dangers both from their own behavior and that of other bankers. It is this that leads us to conclude that if confidence is massively lost in the financial system, governments will assume control over cash, silver and gold. With their being no likelihood of a change in the morality of bankers, it is inevitable that at some point in the future, governments through their central bankers will assume total control of these elements within their own Jurisdictions.

Gold ETFs – There were no sales or purchase of gold from the SPDR gold ETF or the Gold Trust yesterday, leaving their respective holdings at 949.139 tonnes and 226.68 tonnes.  

Silver – Silver prices, alongside gold, are stabilizing, waiting for more action on the gold ETF buying or selling front.

Julian D.W. Phillips

GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance

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