Superb environment for gold and silver prices

 

Gold TodayNew York closed at $1,287.30 yesterday after the previous close of $1,278.00 London opened at $1,295.00.

    • The $: € was weaker at $1.1065: €1 from $1.0975: €1 yesterday.
    • The Dollar index was weaker at 97.69 from 98.37 yesterday.
    • The Yen was stronger at 103.91: $1 from yesterday’s 104.94 against the dollar.
    • The Yuan was stronger at 6.7650: $1 from 6.7756: $1 yesterday.

 

  • The Pound Sterling was stronger at $1.2242: £1 from yesterday’s $1.2230 £1.

 

Yuan Gold Fix

Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
     2016  11    2      

     2016  10    1

     2016  10  31

SHAU

SHAU

SHAU

281.71

279.15

278.98

282.08

/

279.25

$ equivalent 1 oz @ $1: 6.7650

$1: 6.7756

$1: 6.7751

$1,295.22

$1,281.44

$1,280.76

$1,296.92

/

$1,282.00

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.]

Today we see no premium in Shanghai over New York, indeed it looks more like London and New York are now rising faster than Shanghai as you can see above.

LBMA price setting:  The LBMA gold price setting was at $1,295.85 against yesterday’s $1,284.40. The gold price in the euro was set higher at €1,165.41 against yesterday’s €1,165.41.

Ahead of the opening of New York the gold price was trading at $1,298.40 and in the euro at €1,170.26.  At the same time, the silver price was trading at $18.62.

Silver Today –The silver price rose to $18.33 at New York’s close yesterday from $17.88, Monday.  

Price Drivers

What has changed in the last day? The dollar has gone weaker which is what Treasury has wanted all along. Why yesterday? The election race has changed with the institution of more investigations into Hillary Clinton’s e-mails, which brought the polls to a point where the Trump camp has caught up with the Clinton camp. This has set global financial markets on edge.  A Trump win signifies a Republican government and an end to political gridlock. It also heralds change in the U.S. and, we see a boost to de-globalization attitudes with greater divisions between east and west as a more aggressive U.S. tries to halt or temper the growing global Chinese influence. All this will be set against slowing global growth and excessive debt levels. It is clear that markets are guarding against a Trump Presidency and taking positions accordingly!

This is a superb environment for gold and silver prices!

Gold ETFs – There were purchases of 2.67 tonnes of gold into the SPDR gold ETF and purchases of 0.6 of a tonne into the Gold Trust yesterday, leaving their respective holdings at 945.289 tonnes and 231.63 tonnes.  

Since January 4th this year, the holdings of these two gold ETFs have risen by 375.91 tonnes.

Silver – Silver performed well in the last two days but may pause once gold is over $1,300.

Julian D.W. Phillips

GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance

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