Gold and silver building strength

Gold TodayNew York closed at $1,337.90 Friday after the previous close of $1,337.10.  London opened at $1,334.00.

    • The $: € was weaker at $1.1252: €1 from $1.1212: €1 Friday.
    • The Dollar index was weaker at 95.32 from 95.41 Friday.
    • The Yen was stronger at 100.44: $1 up from 100.84: $1 Friday against the dollar.
    • The Yuan was slightly weaker at 6.6701: $1 from 6.6693: $1 Friday.


  • The Pound Sterling was slightly weaker at $1.2933: £1 from Friday’s $1.2968: £1.


Yuan Gold Fix

Trade Date Contract Benchmark Price AM Benchmark Price PM
     2016  09  26

     2016  09  23







Dollar equivalent @ $1: 6.6701

$1: 6.6693





New York, Shanghai were in line but London again tried to pull prices down, while exchange rates showed a slightly mixed picture with the dollar tending weaker.

The gold price in global gold markets is trying to weaken as it  appears to be gathering strength to attack overhead resistance once more.

LBMA price setting:  The LBMA gold price setting was at $1,336.30 against Friday’s $1,335.90.

The gold price in the euro was set at €1,187.61 against Friday’s €1,191.12.

Ahead of the opening of New York the gold price was trading at $1,337.00 and in the euro at €1,186.71.  At the same time, the silver price was trading again at $19.50.

Silver Today –The silver price fell to $19.66 at New York’s close Friday down from $19.80, Thursday.  

Price Drivers

Since the last announcement from the Bank of Japan, where little was changed, Mr. Kuroda of the bank has spoken in such a way as to encourage a weaker Yen, saying he would venture further into negative interests rates should the need arise. It had little impact on the dollar: Yen exchange rate.

In the E.U. Mario Draghi is being more forthright and calling for governments to implement structural reforms to spur growth. We doubt member state governments are listening let alone planning to do anything, even going so far as to point fingers at Draghi and the E.C.B.

Economic growth looks poor there opening up the E.U. for political and economic crises which have taken a long time in coming, but when one reflects on Draghi’s words, one can see them getting closer.

In China we are told that debt is 250% of GDP. Taken by itself it is alarming and threatening future growth, if we see big defaults. But, as we know the government not only has absolute control of the economy, but also its institutions. So, western criteria will not be allowed to apply there. Every effort there is being made to transition the economy from being export led [building up wealth drawn in from the developed world] to a self sustaining one reliant on the growth of the middle classes which will take China towards a developed economy. Hence we do not see a very hard landing, unless this transition fails to gain sufficient momentum so as to be self sustaining.

Considering the global economy from what we have commented on today, the outlook from a macro-economic viewpoint continues to be positive for gold and silver.

Short-term, the main gold price driver in the U.S. is demand for U.S. based gold ETFs.

Gold ETFs – There were purchases of 0.297 tonnes into the SPDR gold ETF and of 0.60 of a tonne into the Gold Trust Friday, leaving their respective holdings at 951.216 tonnes and 224.41 tonnes.

These purchases had virtually no impact on the gold price, leaving us in a position of waiting to see if more substantial purchases are coming. This is what’s needed to move gold and silver prices higher.

Since January 4th this year, the holdings of these two gold ETFs have risen by 375.324 tonnes.

Silver – Silver prices retreated quickly when only small buying was seen in the gold ETFs. We do see ongoing volatility in the silver price this week.

Julian D.W. Phillips | | StockBridge Management Alliance

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