Gold moves over $1,200 without Shanghai. Silver advances too.

Gold Today –New York closed at $1,190.90 on the 30th January after closing at $1,190.90 on the 27th January. London opened at $1,1201.00 today.

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

         The $: € was weaker at $1.0711: €1 from $1.0696: €1 yesterday.

         The Dollar index was weaker at 100.34 from 100.55 yesterday. 

         The Yen was slightly stronger at 113.66:$1 from yesterday’s 114.86 against the dollar. 

         The Yuan was unchanged at 6.8772: $1, from 6.8772: $1, yesterday. 

         The Pound Sterling was weaker at $1.2502: £1 from yesterday’s $1.2545: £1.

 Yuan Gold Fix

 Shanghai is closed today until Friday for the Lunar New Year celebrations.

LBMA price setting:  The LBMA gold price was set today at $1,198.80 up from yesterday’s $1,189.85.  

The gold price in the euro was set lower at €1,119.85 after yesterday’s €1,115.34.

Ahead of the opening of New York the gold price was trading at $1,197.75 and in the euro at €1,118.71.  At the same time, the silver price was trading at $17.18. 

Silver Today –Silver closed at $17.15 at New York’s close yesterday against $17.12 on the 27th January. 

Price Drivers

On Monday in New York, there were purchases of gold into the Gold Trust of 0.60 of a tonne, still not enough to affect the gold price, which continued to rise after President Trump announced his Executive Order on Immigrants. There was no change in the holdings of the SPDR gold ETF, so we see the rise in the gold price over $1,200 as a rise that could easily be turned back. But there are only two more days to do that as Chinese demand returns on Friday. China continues to enjoy its Lunar New Year. We expect gold’s price action to be subdued until they return.

The furore over the President’s executive order looks to outsiders as somewhat chaotic with markets reacting seemingly to the emotions stirred up and not to economic realities. What amazes outsiders is that he won the Presidency on the policies he is enacting now. Did they think he was lying just to get votes then back off his policies? What is for sure is that he will continue to walk this road, so we expect the current tone of his Presidency to continue to be combative and upset the establishment. At this point in time, we would think that his actions will be gold neutral. Only when he announces his fiscal policies do we see it touching the U.S. gold world.

Gold ETFs – Friday, in New York, there were no sales or purchases of gold from or into the SPDR gold ETF (GLD) but there was a purchase of 0.60 of a tonne into the Gold Trust (IAU), leaving their respective holdings at 799.070 tonnes and 198.90 tonnes. 

Since January 4th 2016, 197.09 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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