Gold rises, dollar falls, on FOMC minutes consideration

Gold Today –New York closed yesterday at $1,282.90. London opened at $1,288.10 today. 

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

         The $: € was weaker at $1.1743 after the yesterday’s $1.1725: €1.

         The Dollar index was stronger at 93.64 after yesterday’s 93.89

         The Yen was weaker at 110.02 after yesterday’s 110.86:$1. 

         The Yuan was much stronger at 6.6713 after yesterday’s 6.6926: $1. 

         The Pound Sterling was almost unchanged at $1.2887 after yesterday’s $1.2883: £1

Yuan Gold Fix
Trade Date     Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    8    17

     2017    8    16           

     2017    8    15







Trading at 277.2



$ equivalent 1oz at 0.995 fineness

@   $1: 6.6713

       $1: 6.6926

       $1: 6.6792     



Trading at $1,287.38$1,271.28


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 $11.38 higher than Shanghai’s close yesterday. Then today sees Shanghai jumping to $4.48 higher than New York’s close before London opened nearly a $1.00 higher than Shanghai, as the dollar started to resume its fall.

All three global gold centers are reacting to the falling dollar today. What is of great interest is that the concept of Shanghai having a “premium” over London is just about dead. We are seeing a truly global gold price now, both ways. We have no doubt now that global gold prices are here to stay and that the impact of COMEX ‘paper’ gold prices has almost been removed as the significance of New York’s gold prices has diminished, in favour of the global gold price. This is a significant point in the evolution of the gold price!

Silver Today –Silver closed at $16.94 yesterday after $16.71 at New York’s close Tuesday.

LBMA price setting:  The LBMA gold price was set this morning  at $1,285.90 from yesterday’s $1,270.15.  The gold price in the euro was set again at €1,098.78 after yesterday’s €1,084.67.

Just before the opening of New York the gold price was trading at $1,286.50 and in the euro at €1,098.54. At the same time, the silver price was trading at $17.10. 

Price Drivers

The dollar appears to have turned down to resume its fall to lower levels. It has bounced down off overhead resistance. This is now reflected in the exchange rate against the dollar as well as the gold price. Take a look at the gold price in the euro and it shows that gold is €10 higher at the opening, so the gold price is rising against all currencies now.

It was after the Fed Minutes came out that the dollar changed direction. Market hopes that tightening is still on the cards were disappointed.  As we write the dollar is trying to strengthen, but the index remains below 94.

Gold ETFs – Yesterday there were purchases of 4.435 tonnes of gold into the SPDR gold ETF but no change in the Gold Trust yesterday. The SPDR gold ETF and Gold Trust holdings are at 795.443 tonnes and at 213.28 tonnes respectively.

It does appear that U.S. investors are listening to their peers who are recommending gold to the extent of 10% – 15% of their portfolios as more warnings of toppy markets in U.S. equities become more apparent.

Since January 4th 2016, 171.08 tonnes of gold have been added to the SPDR gold ETF and to the Gold Trust. 

Since January 6th 2017, 9.114 tonnes have been added to the gold ETFs we follow.

 Julian D.W. Phillips | StockBridge Management Alliance 

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