Gold and silver slipping but still sitting on support

Gold Today –Gold closed in New York at $1,310.90 on Tuesday after Monday’s close at $1,323.20.  London opened at $1,313.

  • The $: € was stronger at $1.1136 from $1.1172 yesterday.
  • The dollar index was stronger at 96.11 from 95.76 yesterday.
  • The Yen was weaker at 103.24 from yesterday’s 102.37 against the dollar.
  • The Yuan was slightly stronger at 6.6787 from 6.6800 yesterday.
  • The Pound Sterling was stronger at $1.3102 from yesterday’s $1.3072.

Yuan Gold Fix

Trade Date Contract Benchmark Price AM Benchmark Price PM
2016  08  31

2016  08  30







Dollar equivalent @ $1: 6.6787

$1: 6.6800





Shanghai was stronger than New York yesterday, then London walked the middle road opening at $1,313. The dollar is again strong today, but the Yuan was slightly stronger still. We are aware of the care with which the People’s Bank of China is handling the exchange rate so as to not appear to be purposely devaluing against the dollar, with only a month to go before the Yuan is home and dry as part of the S.D.R.

The dollar continues to strengthen.

LBMA price setting:  The LBMA gold price setting on Wednesday was at $1,314.45. On Tuesday it was at set at $1,318.85.

The gold price in the euro was set on Wednesday at €1,180.04 down on Tuesday’s 1,180.71.

Ahead of the opening in New York the gold price was trading at $1,307.00 and in the euro at €1,173.99.  The silver price is trading at $18.65 ahead of New York’s opening.

Silver Today –The silver price closed in New York at $18.61 Tuesday down from $18.84 Monday. 

Price Drivers

Yet again it is the dollar that is dictating gold prices in the U.S. as lackluster action on the physical side of the market continues to have little to no influence on the gold price. ETF purchases and sales are at negligible levels.

On the Technical side the gold price in the dollar is getting closer to its low target. Support at and below $1,300 is very large.  All over the world the price of $1,300 is becoming the ‘right point of entry’ into the gold market.

  • In Asia that is true, as the Yuan, while slipping persistently is giving a Yuan gold price that is looking fair too.
  • In India the Rupee gold price is well off its historic lows but still a way away from its peak. The current Rupee gold price has been around that level long enough for it to also be a good point of entry.
  • In Japan with, at last, a slipping Yen the Japanese gold investor realizes that the time to buy gold has been around for a while. They, as we said in an article being published shortly, are very aware of the probability that gold could be confiscated by the Japanese government to support the Yen’s credibility.

Then we note that the final and best quarter of the year for gold is shortly to begin.

Gold ETFs – In New York yesterday there was a sale of 1.187 tonnes from the SPDR gold ETF (GLD) but no change in the holdings of the Gold Trust (IAU). This left their respective holdings at 955.401 tonnes and 225.44 tonnes.

Silver – The silver price was moving higher at $18.7 at London’s opening but is now moving down, but not dramatically, as gold’s moves looked like they may continue to go down. Once again we are seeing greater vigor in the silver price on the upside just as it demonstrated vigor when falling down from over $20. Will it now pick up downward vigor? The fundamentals of gold are weighed in favor of an upside move back to that level, but may slip further before these kick in, so now we wait to see what New York will do with the silver price.

Julian D.W. Phillips | | StockBridge Management Alliance

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