Gold consolidates as dollar continues to fall

Gold Today –New York closed yesterday at $1,269.20. London opened at $1,266.75 today. 

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

         The $: € was almost unchanged at $1.1832 after the yesterday’s $1.1833: €1.

         The Dollar index was almost unchanged at 92.99 after yesterday’s 92.98

         The Yen was weaker at 110.78 after yesterday’s 110.47:$1. 

         The Yuan was weaker at 6.7253 after yesterday’s 6.7179: $1. 

         The Pound Sterling was stronger at $1.3223 after yesterday’s $1.3202: £1

Yuan Gold Fix
Trade Date     Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    8    2

     2017    7    1           

     2017    7  31

SHAU

SHAU

SHAU

/

275.29

275.85

Trading at 275.30

275.37

275.46

$ equivalent 1oz at 0.995 fineness

@   $1: 6.7253

       $1: 6.7179

       $1: 6.7282     

  /

$1,269.58

$1,270.12

Trading at $1,268.22

$1,269.06

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.]

 New York closed at almost the same level as Shanghai’s yesterday’s close. London opened at $1.50 lower than Shanghai. All three global gold markets continue in sync. Because New York reached $1,275 at one point, it is clear that Shanghai is dominant as it started a small shift downwards.

Silver Today –Silver closed at $16.76 yesterday after $16.78 at New York’s close Monday.

LBMA price setting:  The LBMA gold price was set this morning at $1,266.25 from yesterday’s $1,267.05.  The gold price in the euro was set at €1,070.55 after yesterday’s €1,071.95.

Just before the opening of New York the gold price was trading at $1,268.00 and in the euro at €1,072.21. At the same time, the silver price was trading at $16.60. As trading continued gold rose back up through the key $1,270 level

Price Drivers

The gold price consolidated yesterday as the currency markets calmed down. The dollar index’s decline paused, but we expect it to continue down with pauses and corrections. Meanwhile gold is pausing in its rise as the key $1,290 and $1,300 levels are now in sight. In the past these price levels have proved effective resistance.

We look across to the equity markets and see that the Dow is just about to climb over the 22,000 level. While this is a record achievement, it brings to mind that above that level investors who buy there must believe that there is a profitable distance to go in  that index.

With the disappointing data coming out now we can see that our comments about the equity markets may be closer than most think. With President Trump now returning to his negative comments about China we could see pressures in currency markets coming with a high degree of uncertainty.

Likewise Alan Greenspan’s comments about bond prices ‘popping’ tells us that bond holders may well be asking what more is there left by way of profit in the bond market? The slightest hint of tightening could cause the bond market to ‘pop’!

Gold ETFs – The SPDR gold ETF holdings remain unchanged as no sales or purchases took place yesterday but in the Gold Trust purchases of 1.14 tonnes took place. The SPDR gold ETF and Gold Trust holdings are at 791.875 tonnes and at 212.01 tonnes respectively

This is the first sign  that U.S. investors are looking kindly on gold investments after the heavy month of sales from the SPDR gold ETF.

Julian D.W. Phillips 

GoldForecaster.com | StockBridge Management Alliance 

 

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