The environment is positive for gold

Gold TodayNew York closed at $1,273.60 yesterday. London opened at $1,266.00.

    • The $: € was weaker at $1.0920: €1 from $1.0911: €1 yesterday.
    • The Dollar index was stronger at 98.82 from 98.59 yesterday.
    • The Yen was weaker at 105.32: $1 from yesterday’s 104.13 against the dollar.
    • The Yuan was weaker at 6.7802: $1 from 6.7720: $1 yesterday.
  • The Pound Sterling was weaker at $1.2126: £1 from yesterday’s $1.2187:£1.

Yuan Gold Fix

Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
     2016 10   28      

     2016  10  27

     2016  10  26










$ equivalent 1 oz @ $1: 6.7797

$1: 6.7720

$1: 6.7720







Please note that the Shanghai Fixes are for 1 gm of gold. From the Middle Eat eastward metric measurements are used against 0.9999 quality gold. [Please note that the 0.5% difference in price can be accounted for by the higher quality of Shanghai’s gold on which their gold price is based over London’s ‘good delivery’ standard of 0.995.]

Take a look at the last three days of Shanghai gold Fixings. Allow for the different qualities of gold being priced and you see Shanghai holding higher than New York and London. And this is in the face of heavy sales of physical gold from the U.S.  We need to watch this pattern and see if there are more ‘bear raids’ to come? If there are and the gold price holds over $1,265, then we are seeing a fundamental shift in the place where the gold prices are made. This is a battle going unnoticed in the western financial press. Well you saw it here first!

LBMA price setting:  The LBMA gold price setting was at $1,265.90 against yesterday’s $1,273.90. The gold price in the euro was set lower at €1,159.67 against yesterday’s €1,166.25.

Ahead of the opening of New York the gold price was trading at $1,266.65 and in the euro at €1,160.25.  At the same time, the silver price was trading at $17.61.

Silver Today –The silver price rose to $17.63 at New York’s close yesterday from $17.75, the day before yesterday.  

Price Drivers

While the world ‘menu du jour’ remains the U.S. Presidential election it is having little, if any, impact on the gold price or financial markets.

What is dictating prices in all currencies are their moves against each other, not just against the dollar, for the dollar tries to pull back, when too high, lifting gold prices on a daily basis in the dollar. One needs to see the gold price in each currency.

But the big feature of the week are the two ‘bear raids’ where over 30 tonnes of gold was sold out of the SPDR gold ETF in the last week, the first part last Friday and the second on Wednesday. Normally this would have been more than enough to damage the gold price, but instead, the gold price has risen to attack $1,275 and has now pulled back from that level to build strength for the next attack.

Certainly something fundamental is going on, as seen in the way that Shanghai is holding higher ground at their p.m. Fix, for the last few days. Is China leading the gold price now? It would seem so! But let’s gather more information before we conclude so.

Subscribers should note that the forces driving gold prices are totally different in the east to those in the west. In the east the motive is to buy and hold for financial security in a world where government’s actions and their currencies are not reliable security.

In the west the motive is usually for dollar profits to be taken from relatively short term periods. Governments and the banking system is usually believed to be the only ‘money’, most investors having little to no understanding of gold as money or financial security.  

This will only change once confidence in the developed world monetary system hits a crisis. If we listen to the august financial bodies such as the IMF, BIS and World Bank, we are entering a period when such a crisis is close by. But to ensure you can benefit from the higher gold prices we see then, we need to hold it in a manner that makes sure it can’t be taken from us. The environment is positive for gold, so these prices rises we are seeing now are looking solid.

Gold ETFs – There were no sales or purchases from or into the SPDR gold ETF but there was a sales the day before of 14.237 tonnes of gold from the SPDR gold ETF but after a purchase of o.45 of a tonne into the Gold Trust the day before yesterday we saw another purchase of 1.94 tonnes yesterday, leaving their respective holdings at 942.589 tonnes and 230.55 tonnes.  

Since January 4th this year, the holdings of these two gold ETFs have risen by 372.16 tonnes.

The sale of 14.237 tonnes should be added to the sales on Friday last of 16.611 totaling 30.848 tonnes in the last week. This should have hurt the gold price, but instead we are seeing the gold price rising then holding onto higher levels.

Silver – Silver is still trying to decide which way to go and until gold moves strongly higher or lower and will thus continue to vacillate.

Julian D.W. Phillips | | StockBridge Management Alliance


2 thoughts on “The environment is positive for gold

  1. albertwt October 30, 2016 / 8:15 am

    Hm, this is interesting. from this website:

    Does this means that the Gold price is lower on the western side of the world due to the USA is still uncertain about the election and the US interest rate ?


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