Gold and Silver rising as Trump takes office

Gold Today –New York closed at $1,207.60 on the 20th January after closing at $1,201.50 on the 19th January. London opened at $1,212.00 today.

 Overall the dollar is weaker against global currencies today. Before London’s opening:

         The $: € was weaker at $1.0730: €1 from $1.0679: €1 Friday.

         The Dollar index was weaker at 100.42 from 100.97 Friday. 

         The Yen was stronger at 113.61: $1 from Friday’s 114.73 against the dollar. 

         The Yuan was stronger at 6.8546: $1, from 6.8765: $1, Friday. 

         The Pound Sterling was stronger at $1.2452: £1 from Friday’s $1.2355: £1.

 Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    1    23

     2017    1    20

      2017    1    19










$ equivalent 1oz @  $1: 6.8546

      $1: 6.8765

$1: 6.8767







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 trading today at around 271 Yuan having touched slightly higher during the day. On today’s exchange rate this equates to $1,229 with the dollar weaker across the board as well as against the Yuan.

New York, on Friday closed at only a $4.60 discount to prices in Shanghai on Friday and London opened on Monday $12.00 higher than Shanghai. Shanghai is, once again driving prices despite the stronger Yuan against the dollar. It demonstrates that gold is rising against all currencies today and in all gold markets.

LBMA price setting:  The LBMA gold price setting this morning was at $1213.75, against Friday’s $1,199.10. 

The gold price in the euro was set lower at €1,127.93 after Friday’s €1,127.93 as the dollar continued to weaken.

Ahead of the opening of New York the gold price was trading at $1,214.40 and in the euro at €1,131.00.  At the same time, the silver price was trading at $17.12. 

Silver Today –Silver closed at $17.07 at New York’s close Friday from $17.00 on the 19th January. 

 Price Drivers

On the day of President Trump’s inauguration we saw a purchase of size [but not very large] of 1.185 tonnes into the SPDR gold ETF. This is the second purchase in the last fortnight, of size, into the fund. It does indicate that the selling has stopped and the buying has begun again.

President Trump looks as though he will keep his campaign promises regarding foreign policies. He looks as though he will ensure a protectionist introverted set of policies that will move away from the avuncular, [get it right by following us], global policy “We act only in our national interests to ‘make America great’ again!” policies.

We see the initial consequences as him holding to his promise of not buying O.P.E.C. oil issues to get this prospect filled out], to getting out of Trade pacts that did not suit the U.S. and going headlong at China in a Trade war of sorts.

He wants the dollar lower, the E.U. wants the euro lower, the U.K. wants a weaker pound and Japan wants a lower Yen. Against who, we ask?!!!

President Trump’s opinion on the dollar, we believe, is in line with both the Fed’s and the Treasury’s, making today’s fall in the dollar no surprise. His opinion has probably removed internal barriers to seeing the dollar go lower anyway.

All of this is long, medium and likely short term, positive for gold! For instance with China asserting Capital Controls on the outflow of wealth that does not benefit China and who are still encouraging investments in gold by their citizens, the Shanghai Gold Exchange is driving gold prices globally still.  The global fundamentals remain positive for gold.

Gold ETFs – Friday, in New York, there were purchases of 1.185 tonnes of gold into the SPDR gold ETF (GLD) but there were no purchases or sales into or from the Gold Trust (IAU), leaving their respective holdings at 809.145 tonnes and 198.75 tonnes. 

Since January 4th 2016, 207.015 tonnes of gold has been added to the SPDR gold ETF and to the Gold Trust. 

 Julian D.W. Phillips | | StockBridge Management Alliance 

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