Dollar down against gold; gold up against all currencies

Gold Today –New York closed at $1,190.90 on the 11th January after closing at $1,187.20 on the 10th January. London opened again at $1,204.75 today.

 Overall the dollar is weaker against global currencies today. Before London’s opening:

-         The $: € was weaker at $1.0631: €1 from $1.0554: €1 yesterday.

-         The Dollar index was weaker at 101.25 from 102.09 yesterday. 

-         The Yen was stronger at 114.52: $1 from yesterday’s 116.05 against the dollar. 

-         The Yuan was stronger at 6.9115: $1, from 6.9225: $1, yesterday. 

-         The Pound Sterling was stronger at $1.2249: £1 from yesterday’s $1.2156: £1.

 Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    1    12

     2016    1    11

      2016  12    10










$ equivalent 1oz @  $1: 6.9115

      $1: 6.9225

$1: 6.9244







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.]

 Shanghai continues to lead the way for the gold price. And as happened yesterday London and New York rose too. With Shanghai prices continuing to rise we expect London and New York to rise  again too. To catch Shanghai up, prices in New York need to rise another $15. London is now in line with yesterday’s Shanghai gold price.

LBMA price setting:  The LBMA gold price setting was at $1,206.65 this morning against yesterday’s $1,187.55. 

The gold price in the euro was set higher at €1,133.96 after yesterday’s €1,128.31 as the dollar weakened.

Ahead of the opening of New York the gold price was trading at $1,204.20 and in the euro at €1,131.55.  At the same time, the silver price was trading at $16.89. 

Silver Today –Silver closed at $16.73 at New York’s close yesterday from $16.79 on the 10th January. 

 Price Drivers

The dollar is weaker today with the media attributing that to Trump’s failure to describe his financial policies.  What appears to be happening is that the honeymoon with the Trump Presidency is over, before it began. But, as we described yesterday, such temporary news in the U.S. did not cause the buyers of gold to rush out and buy in the U.S. Most of the buying occurred in China yesterday, with no movement whatsoever in the U.S. based gold ETFs.

The rise in the gold price in dollars was in fact the fall of the dollar reflected in a higher dollar gold price together with Chinese demand as reflected in the Yuan gold prices [above].

Should U.S. investors return to the gold market as buyers of physical gold [via gold ETFs in particular], the additional demand from the U.S. will drive gold and silver prices much higher! Should demand from India, once Indians have usable cash again, their additional demand will add to the upward pressures on the gold price. We see Chinese demand driving gold prices higher alongside falling currency values.

Gold ETFs – Yesterday, in New York, there were no sales or purchases from the SPDR gold ETF (GLD) or any from or into the Gold Trust (IAU), leaving their respective holdings at 804.996 tonnes and 198.30 tonnes. 

As we said in an earlier report, “Substantial sales of gold on a daily basis are needed for New York to control the gold price”.

Since January 4th 2016, 202.416 tonnes of gold has been added to the SPDR gold ETF and to the Gold Trust.  We remain at almost at half the total level accumulated in 2016.

Julian D.W. Phillips | | StockBridge Management Alliance 


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