Gold price waiting on election results

Gold TodayNew York closed at $1,281.50 yesterday after the previous close of $1,304.20 London opened at $1,284.00.

    • The $: € was stronger at $1.1043: €1 from $1.1073: €1 yesterday.
    • The Dollar index was slightly stronger at 97.76 from 97.54 yesterday.
    • The Yen was unchanged at 104.45: $1 from yesterday’s 104.46 against the dollar.
    • The Yuan was weaker at 6.7785: $1 from 6.7745: $1 yesterday.

 

  • The Pound Sterling was weaker at $1.2390: £1 from yesterday’s $1.2446 £1.

 

Yuan Gold Fix

Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
     2016  11    8      

     2016  10    7

     2016  10    4

SHAU

SHAU

SHAU

280.73

282.27

283.64

/

281.99

283.00

$ equivalent 1 oz @ $1: 6.7785

$1: 6.7745

$1: 6.7619

$1,288.14

$1,295.97

$1,304.69

/

$1,294.69

$1,301.75

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.]

Shanghai closed in line with other world gold markets today. No p.m. Fixing was given. The Yuan continues to weaken and will continue doing so. Ironically, its fall is being tempered by the People’s Bank of China which is selling dollars to ensure the fall is not ‘brutal’ and stem accusations of manipulation.

LBMA price setting:  The LBMA gold price setting was at $1,284.00 against yesterday’s $1,286.80. The gold price in the euro was set higher at €1,162.41 against yesterday’s €1,162.95.

Ahead of the opening of New York the gold price was trading at $1,284.20 and in the euro at €1,162.49.  At the same time, the silver price was trading at $18.34.

Silver Today –The silver price fell to $18.22 at New York’s close yesterday from $18.39, Thursday.  

Price Drivers

Global financial markets are on hold until we hear the results of the U.S. Presidential election tomorrow. As we saw earlier in the last week, when Mrs. Clinton looked to be in trouble with the FBI, gold rose, discounting a Trump victory, but when exonerated, the gold price pulled back as a Clinton victory was discounted. At current levels a Clinton victory remains discounted in all world markets. The amount by which it is being discounted is not that large, so don’t expect major dramas unless Trump wins, which appears only likely if the desire for change brings out voters who don’t usually vote. The world waits, braced! The gold and silver markets are no place for widows and orphans right now!

Meanwhile we are hearing that in India demand is down heavily. We find that hard to believe as Indians have no qualms in buying smuggled gold to avoid the taxes on gold now and likely in the future. The latest suggestions imply that bureaucrats will attempt to pry open the black market in gold, which as decades ago, failed. All that has happened is that smuggling has become institutionalized. We believe that Indian gold demand is strong.

In China, while the disclosed figures point to a 28% fall in demand as stated by Shanghai withdrawals demand levels annualized point to over 2,000 tonnes with up to 520 tonnes being mined locally. Bear in mind exports of gold are not permitted from China. Overall the numbers remain opaque as the SGE can hold gold by itself and these figures are not reported. Likewise the People’s Bank of China can hold gold in its agencies for its reserves without disclosing these figures.

Gold ETFs – There were no purchases or sales of gold into or from the SPDR gold ETF or the Gold Trust Friday, leaving their respective holdings at 949.688 tonnes and 230.99 tonnes.  

Since January 4th this year, the holdings of these two gold ETFs have risen by 379.669 tonnes. This reflects the wait and see attitude of investors.

Silver – Silver should move further than gold after the results are announced, either way!

Julian D.W. Phillips

GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance

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