Julian Phillips’ latest commentary on the gold and silver markets and factors driving them
New York closed yesterday at $1,203.40 up $7.80. Asia held it there before London opened, where it slipped to $1,197.00 ahead of the LBMA Gold price where it was set at $1,198 down $11.40 but higher than the market was trading before the price was set. The euro equivalent stood at €1,106.54 up €6.89. Ahead of New York’s opening, gold was trading in London at $1,200.40 and in the euro at €1,106.36.
The silver price closed at $17.05 up 8 cents. Ahead of New York’s opening it was trading at $17.07.
There were sales of 5.97 tonnes of gold from the SPDR gold ETF but nothing from or to the Gold Trust on Thursday. The holdings of the SPDR gold ETF are at 737.237 tonnes and at 164.71 tonnes in the Gold Trust. This sale did pull New York back, but back to support. Asia added to the fall, so now on the busiest day of the week we wait to see if support will hold. As we said yesterday, “If the gold price holds above $1,200 it is support, once again. The next two days will see if it holds.”
The dollar is starting to recover taking the dollar index back to 97.67 up from 96.43 while the euro is slipping standing now $1.0827 down from $1.1013 yesterday. The dollar is looking toppy so we do expect it to slip back or consolidate at current levels. This leaves the gold and silver prices, once again embroiled in currency moves.
However, just in case you haven’t factored this in, the gold price in the euro is now well above support at over €1,106. The overview is therefore that all currencies are now slipping against the dollar once more, but this may not last for long as the dollar does look vulnerable. Any more rises in the dollar will be firmly against the interests of the U.S. as implied by the Fed and clearly followed through on by the Treasury.
Gold in currencies other than the dollar has done very much better than in the dollar. In the dollar, gold has moved away from its lows and regained a point where, if support holds, it can move strongly higher. But in other currencies that have weakened against the dollar gold is seeing good gains. Demand from nations other than the U.S. [which is a relatively small long-term player and consumer of gold] is rising as gold is recovering well.
What is surprising is that the Yuan is stronger than the dollar at 6.20 up from 6.24: $1. We cannot see this lasting as it is in China’s interest to see the Yuan weaker.