Gold and Silver steady ahead of a move

Gold TodayGold closed in New York at $1,277.30 yesterday down from $1,279.20 on Wednesday. On Friday morning in Asia it rose slightly to $1,279.10, as the Yuan continued to weaken against a slightly stronger dollar, before the LBMA price setting in London.

LBMA price setting:  $1,280.25 up from Thursday’s $1,275.75.

Yuan Gold Fix

Trade Date Contract Benchmark Price AM Benchmark Price PM
2016  05  6

2016  04  5







Dollar equivalent @ $1: 6.5177

$1: 6.5077





The Shanghai Gold Fixings today were around the close in New York, but New York barely moved the gold price during yesterday, nor did London.  

In all main global gold markets the gold price has settled around the $1,277- $1,280 area a feature that usually precedes a hefty move in the gold price.

All ‘hard’ currencies are relatively steady together and, by extension, against the gold price.

The dollar index is the same today as yesterday, at 93.60. The dollar is barely stronger against the euro at $1.1426 from Thursday’s $1.1431.

The gold price in the euro was set at €1,120.47 up from Thursday’s €1,116.04.

Ahead of New York’s opening, the gold price was trading at $1,280.40 and in the euro at €1,120.75.  

Silver Today –The silver price closed in New York on Wednesday lower at $17.34 the same as yesterday. Ahead of New York’s opening the silver price stood at $17.34.

Price Drivers

The center of attention today is the jobs numbers from the Fed just after the opening in New York. A figure of 200,000 has been priced in so any deviation from that will be seen in the dollar and in gold prices in the dollar, in particular.

Japan - While Mr. Abe has now made it clear that he will use the G-7 meeting to drum up support for acceptance of policies that directly weaken the Yen, contrary to their agreement not to manipulated currencies for international trade competitive reasons.  

Globally equity markets continue to slide as fears of global growth slipping, increase. Gradually Mr. Draghi’s words, to Germany, calling for structural reform by governments, are being seen as necessary, across the world. Monetary policy has shot its bolt and has few tools left to achieve more than it has.  It is time for government to step in and actively promote growth through fiscal policy. As to whether they can, is a question that may still not be answered! One professional comment today was that the global economy is soon, ‘to sink below the icy waves.’ Against this backdrop gold is becoming more and more attractive.

We will be watching the growth of wages in the U.S., as reported by the Fed.

Gold ETFs – Thursday saw purchases of 3.903 of a tonne of gold bought into the SPDR gold ETF and another 0.6 of a tonne bought into the Gold Trust. This leaves their holdings at 829.44 and 195.38 tonnes in the SPDR & Gold Trust, respectively.  

The purchases of yesterday and the day before, appear to have been made on the basis that the next move in gold is higher. These were around 10 tonnes!

Silver – The Silver price is now stable and ready to move. As we said again yesterday, silver, “may well rise much faster soon, as gold recovers and then we expect to see a ‘shunt’ effect on the silver price.”

Julian D.W. Phillips | | StockBridge Management Alliance

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