Gold breaches $1,300 albeit briefly

Gold Today –New York closed yesterday at $1,288.70. London opened at $1,293.15 today. 

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

         The $: € was weaker at $1.1750 after the yesterday’s $1.1743: €1.

         The Dollar index was weaker at 93.47 after yesterday’s 93.64

         The Yen was stronger at 109.05 after yesterday’s 110.02:$1. 

         The Yuan was weaker at 6.6769 after yesterday’s 6.6713: $1. 

         The Pound Sterling was stronger at $1.2896 after yesterday’s $1.2887: £1

Yuan Gold Fix
Trade Date     Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    8    18

     2017    8    17           

     2017    8    16

SHAU

SHAU

SHAU

/

277.29

274.83

Trading at 278.0

277.03

274.62

$ equivalent 1oz at 0.995 fineness

@   $1: 6.6769

       $1: 6.6713

       $1: 6.6926     

  /

$1,287.80

$1,272.26

Trading at $1,290.03

$1,286.59

$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 $2.00 higher than Shanghai’s close yesterday. Then today sees Shanghai jumping to $1.33 higher than New York’s close before London opened nearly a $3.12 higher than Shanghai, as the dollar continued its fall and real demand for gold was seen.

All three global gold centers continue to react to the falling dollar today. This is about the dollar once again. There appears to be an effort to curb the euro’s rise, with Draghi saying the euro may be overheating.

The market consensus is that the euro could rise above $1.20.If that happens and the gold price reflects such a rise, then we would see a dollar gold price of $1,317, well above long term resistance.

Silver Today –Silver closed at $17.05 yesterday after $16.94 at New York’s close Wednesday.

LBMA price setting:  The LBMA gold price was set today at $1,295.25 from yesterday’s $1,285.90.  The gold price in the euro was set again at €1,102.72 after yesterday’s €1,098.78.

Just before the opening of New York the gold price was trading at $1,296.00 and in the euro at €1,103.82. At the same time, the silver price was trading at $17.22. After New York opened gold briefly breached the $1,300 psychological level before being brought back down the the mid-$1290s again.

Price Drivers

The dollar is falling once more, but not precipitously. It will lead to higher gold prices if it continues. This is being reflected in today’s prices. There is strength to the rise in gold price that we had not seen before in the previous attacks on $1,300. The causes are solid too. These are; an overvaluation of the dollar, a resuscitation of U.S. demand for physical gold, a dearth of sellers of gold, Shanghai’s demand for gold remains strong as it does in London!

While we rarely attribute gold price rises to political stories and the like, we do feel that the disappointment at President Trump’s efforts to bring great economic changes to the U.S. is resulting in bearish sentiment on the dollar, U.S. equities and the future of interest rate rises.

His abrasive attacks, on all fronts, appear to have undermined his hopes of achieving great things. It does look like the government in the U.S. is unable to rule effectively, at the moment, due to partisan infighting and lack of support amongst even the Republican Party. This is supportive of higher gold prices as U.S. institutional investors advocate a 10% – 15% holding in gold.

Gold ETFs – Yesterday there were no purchases or sales into the SPDR gold ETF or the Gold Trust yesterday. The SPDR gold ETF and Gold Trust holdings are at 795.443 tonnes and at 213.28 tonnes respectively.

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  – GoldForecaster.com | StockBridge Management Alliance

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2 thoughts on “Gold breaches $1,300 albeit briefly

  1. larryzb August 18, 2017 / 8:49 pm

    When gold closes above $1,425, we may then be in a bull market.

    Like

  2. Pingback: Gold breaches $1,300 albeit briefly | bigfootwriterdotcom

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