Gold’s Trump card. Price soars then stutters

Gold TodayNew York closed at $1,275.60 yesterday after the previous close of $1,281.50 London opened at $1,302.00.

    • The $: € was very weak at $1.1240: €1 from $1.1043: €1 yesterday.
    • The Dollar index was weaker at 96.36 from 97.76 yesterday.
    • The Yen was stronger at 102.38: $1 from yesterday’s 104.45 against the dollar.
    • The Yuan was stronger at 6.7644: $1 from 6.7785: $1 yesterday.

 

  • The Pound Sterling was stronger at $1.2488: £1 from yesterday’s $1.2390 £1.

 

Yuan Gold Fix

Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
     2016  11    9      

     2016  10    8

     2016  10    7

SHAU

SHAU

SHAU

282.74

280.73

282.27

288.63

/

281.99

$ equivalent 1 oz @ $1: 6.7644

$1: 6.7785

$1: 6.7745

$1,300.07

$1,288.14

$1,295.97

$1,327.15

/

$1,294.69

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 was watching New York very carefully, but not COMEX, but the campaign headquarters of both sides. The complete surprise with which Trump’s Presidency sprang on the globe is reflected in the change in gold Fixings in Shanghai from a.m. to p.m. as you see above. London pulled back the gold price but we wait until tomorrow to see if Shanghai holds these higher levels or not. This will give an indication of where pricing power lies.

Across the board the dollar is weaker today as a Trump Presidency arrives, much to everyone’s surprise [including his!]. The PB o C was also caught off-guard as the Yuan strengthened against all currencies. We expect the Yuan’s fall will accelerate now to compensate for this, in the next few days.

LBMA price setting:  The LBMA gold price setting was at $1,304.55 against yesterday’s $1,284.00. The gold price in the euro was set higher at €1,174.74 against yesterday’s €1,162.41.

Ahead of the opening of New York the gold price was trading at $1,306.35 and in the euro at €1,176.31.  At the same time, the silver price was trading at $18.77.

Silver Today –The silver price fell to $18.34 at New York’s close yesterday from $18.22, Thursday.  

Price Drivers

The U.S. now knows that ‘Brexit’ feeling and then some! As you can see above, gold and silver will be direct beneficiaries. But here we are not just talking about a rise in prices, but a change in concept for gold, as we see global monetary turbulence, uncertainty and substantial changes to the status quo we have had for nearly a decade.

We see this as accelerating the progress of gold as a monetary asset to a pivotal position in the multi-currency system. We also foresee a move by central banks to either grip onto what they have or to acquire more gold for their reserves. The time that it will central banks will want to take gold from investors, particularly the major holders of gold [including dealers] is advancing fast now.

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.

Now that the U.S. has a President Trump we expect action in the gold ETFs as well as in the broader gold and silver markets.

Silver – Silver should move further than gold today, upwards!

Julian D.W. Phillips

GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance

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