Gold waiting on Yellen and Draghi indicators

Gold Today –New York closed yesterday at $1,286.20. London opened at $1,285.95 today. 

Overall the dollar was slightly weaker against global currencies before London’s opening:

         The $: € was slightly weaker at $1.1799 after the yesterday’s $1.1794: €1.

         The Dollar index was slightly weaker at 93.28 after yesterday’s 93.31

         The Yen was slightly weaker at 109.63 after yesterday’s 109.29:$1. 

         The Yuan was slightly stronger at 6.6609 after yesterday’s 6.6621: $1. 

         The Pound Sterling was slightly stronger at $1.2822 after yesterday’s $1.2807: £1

Yuan Gold Fix
Trade Date     Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    8    25

     2017    8    24           

     2017    8    23







Trading at 277.60



$ equivalent 1oz at 0.995 fineness

@   $1: 6.6609

       $1: 6.6621

       $1: 6.6624     




Trading at $1,289.70



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 $3.20 lower than Shanghai’s yesterday’s close. Today sees Shanghai holding just $0.30higher than yesterday, which was $3.75 higher than London’s opening. The global gold markets remain close to each other with Shanghai barely moving.

Silver Today –Silver closed at $16.95 yesterday after $16.95 at New York’s close, Wednesday.

LBMA price setting:  The LBMA gold price was set this morning at $1,287.05 from yesterday’s $1,285.90.  The gold price in the euro was barely changed being set at €1,090.35 after yesterday’s €1,090.76.

Just before the opening of New York the gold price was trading at $1,287.20 and in the euro at €1,089.19. At the same time, the silver price was trading at $17.03. 

Price Drivers

We cannot remember seeing prices in the precious metals this calm for a few days. As we have said before Shanghai has had a calming effect on global gold markets, but even its calmness is remarkable. It is not that we expect anything dramatic from Jackson Hole but in such a calm market, any news at all, will have an impact.

We feel for Janet Yellen and Mario Draghi as the financial world waits for the slightest hint in their speeches today of dovishness or hawkishness. The slightest stumble on their part could influence the entire financial world. Nevertheless, central bank policies are really the only policies affecting the financial world.

It should be government policy with central bank policy backing up government policy, but governments just don’t seem able to get things done and have not done it since the credit crunch in 2008. In itself, this tells you just how fragile the financial world is, when governments are so emasculated.

It is so fragile that even if the two central bankers were neutral in what they said, the financial world will behave in a mercurial fashion. We do expect action in financial markets today which will turn the market calmness into a storm in the coming weeks.

But we need to be clear on the reality that whatever Yellen and Draghi say that does not directly affect exchange rates, will be gold neutral or will only affect gold prices for the short term. We remind readers that the gold price is a synthesis of global gold prices and not the result of U.S. factors. It reflects the condition of the currency and monetary world which continues to evolve away from dollar hegemony.

Once again there are no purchases or sales into or from the SPDR gold ETF and the Gold Trust as U.S. gold investors wait too.  

Gold ETFs – Yesterday there were no purchases or sales of gold into or from the SPDR gold ETF but there were small purchases into the Gold Trust of 0.44 of a tonne. The SPDR gold ETF and Gold Trust holdings are at 799.286 tonnes and at 215.91 tonnes respectively.

Since January 4th 2016, 177.55 tonnes of gold have been added to the SPDR gold ETF and to the Gold Trust. 

Since January 6th 2017, 15.95 tonnes to the gold ETFs we follow.

Julian D.W. Phillips – | StockBridge Management Alliance 


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