Gold market volatility reducing?

Gold Today –New York closed at $1,247.80 yesterday after closing at $1,244.60 on the 21st March. London opened at $1,246.30 today. 

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

         The $: € was stronger at $1.0787: €1 from $1.0802: €1 yesterday.

         The Dollar index was unchanged at 99.77 from 99.77 yesterday. 

         The Yen was stronger at 111.15:$1 from yesterday’s 111.48 against the dollar. 

         The Yuan was weaker at 6.8860: $1, from 6.8845: $1, yesterday. 

         The Pound Sterling was stronger at $1.2490: £1 from yesterday’s $1.2472: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    3    23

     2017    3    22       2017    3    21

SHAU

SHAU

SHAU

/

278.38

275.97

/

278.46

275.98

$ equivalent 1oz @  $1: 6.8860

      $1: 6.8845

$1: 6.8968

  /

$1,257.69

$1,244.58

/

$1,258.05

$1,244.62

Please note that the Shanghai Fixes are for 1 gm of gold. From the Middle East 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.]

 At the close in Shanghai today, the gold price was trading at 278.65 Yuan, which directly translates into $1,258.64. But allowing for the difference of gold being traded this equates to a price of $1,253.64. This more than $5.84 higher than the New York close and $7.34 higher than London.

You will note how Shanghai prices have been steady after jumping with London and New York’s ‘discounts’ narrowing a great deal. We attribute this to arbitrageurs or western dealers making sure their prices are not out of line. Why do we stress this? It shows the lessening impact of western new items and COMEX actions. It ensures that gold prices are more currency related. We believe it is already reducing the volatility in global gold markets.

LBMA price setting:  The LBMA gold price was set today at $1,247.90 up from yesterday’s $1,246.10.  

The gold price in the euro was set at €1,156.75 after yesterday’s €1,154.76.

Ahead of the opening of New York the gold price was trading at $1,251 35 and in the euro at €1,160.48 At the same time, the silver price was trading at $17.66. 

Silver Today –Silver closed at $17.53 at New York’s close yesterday against $17.52 on the 21st March. Silver prices will follow gold higher today.

Price Drivers

Over the last day gold prices have stabilized at just below $1,250 a point of overhead resistance that has turned the gold price back in recent weeks. It will move through $1,250 today.

As eastern demand is robust now with the Indian wedding season underway and Chinese demand picking up the gold price building strength is tackling $1,250 before more gains.  

Greece

Greece’s bailout story is back on stage as talks deadlocked between the Greek government and the E.U. Will we see a replay of the brinkmanship seen when the new government came in? By the very nature of the two, yes, we will. All expect Greece to cave in, in the end. But what is common in most money dramas across the world is that when drastic action is needed is that it comes when markets are closed at weekends, so governments can surprise their people before they can do anything. Right now as a precaution Greek depositors are withdrawing deposits so as not to be caught in a bail-in as happened in Cyprus.

Of course, they could presume that nothing will happen to the banks and do nothing. History is full of such victims. Likewise in the gold world, when structural changes come they are sprung on us so we are trapped.

Gold ETFs – Yesterday saw no purchases or sales into or from the SPDR gold ETF but a purchase of 0.6 of a tonne into the Gold Trust.  Their respective holdings are now at 834.396 tonnes and 198.42 tonnes. 

 Julian D.W. Phillips 

 GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance 

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