lawrieongold

Gold Today –New York closed at $1,278.00 yesterday after the previous close of $1,274.90 London opened at $1,278.00.

• The $: € was weaker at $1.0975: €1 from $1.0955: €1 yesterday.
• The Dollar index was weaker at 98.37 from 98.55 yesterday.
• The Yen was stronger at 104.94: $1 from yesterday’s 105.00 against the dollar.
• The Yuan was weaker at 6.7756: $1 from 6.7751: $1 yesterday.

 

• The Pound Sterling was stronger at $1.2230: £1 from yesterday’s $1.2158 £1.

 

Yuan Gold Fix

Trade Date	Contract	Benchmark Price AM 1 gm	Benchmark Price PM 1 gm
2016 11     1            2016  10  31      2016  10  28	SHAU SHAU SHAU	279.15 278.98 278.28	/ 279.25 277.78
$ equivalent 1 oz @ $1: 6.7756 $1: 6.7751 $1: 6.7802		$1,281.44 $1,280.76 $1,276.68	/ $1,282.00 $1,274.38

Please note that the Shanghai Fixes are for 1 gm of gold. From the Middle Eat 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.]

Today we see no premium in Shanghai over New York, indeed it looks more like London and New York are now rising faster than Shanghai as you can see above.

LBMA price setting:  The LBMA gold price setting was at $1,284.40 against yesterday’s $1,274.20. The gold price in the euro was set higher at €1,165.41 against yesterday’s €1,163.12.

Ahead of the opening of New York the gold price was trading at $1,287.70 and in the euro at €1,167.40.  At the same time, the silver price was trading at $18.27.

Silver Today –The silver price rose to $17.88 at New York’s close yesterday from $17.77, Friday.  

Price Drivers

Growth in international trade is slowing, as describe by shipping statistics. It is the first time since World War II that trade with other nations has declined during a period of economic growth. Sluggish global economic growth is both a cause and a result of the slowdown. It is a structural phenomenon that will be much longer term and deflationary.

If a recession is seen in the U.S., it will be worse in the E.U. This will lead to rapidly rising debt levels and debt: GDP levels. Unless ground level economic growth [and not one manipulated by monetary measures] deflation will take an increasingly firmer hold. No wonder that the Fed is holding back from raising rates.

The news from China that manufacturing is starting to recover [PMI at 52.1 –signalling growth is back in manufacturing there] is not an indication that global growth is on the rise. It signals Chinese manufacturing is on the rise. China is building an ‘empire’ slowly but surely and drawing manufacturing from the developed world and moving its economy to a self-sustaining, self-sufficient economy, in competition and independent of the developed world.

With China now entering the airplane building business, both military and commercial and achieving competitive results, another important side of global manufacturing will come under attack! This entire process is set to continue for the foreseeable future. This is a very positive climate for gold, for the foreseeable future.

Three leading global banks have call to the Fed to not raise rates in 2016. No rate hike is expected from the 2 day meeting this month.

Gold ETFs – There were no sales or purchases from or into the SPDR gold ETF but purchases of 0.48 of a tonne into the Gold Trust yesterday, leaving their respective holdings at 942.589 tonnes and 231.03 tonnes.  

Since January 4th this year, the holdings of these two gold ETFs have risen by 372.64 tonnes.

Silver – Silver is now starting to accelerate the pace of its rise as gold conquers overhead resistance and looks upwards.

Julian D.W. Phillips

GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance