New York closed with the gold price at $$1,137.30 up from $1,114.30 on Friday. China remains closed until Thursday in its ‘Golden Week’ holiday. When London opened the gold price slipped to $1,135.00 after which it was set at $1,134.35 up from Friday’s $1,106.30 at the LBMA gold setting. The dollar Index was down at 95.58 from 96.30 and the dollar trading against the euro at $1.1268 down from $1.1165. In the euro the fixing was €1,006.70 up from €990.86. Ahead of New York’s opening gold was trading at $1,133.00 and in the euro at €1,107.60.
The silver price closed at $15.24 up from $14.56 or 68 cents over Friday in New York. Ahead of New York’s opening, silver was trading at $15.31.
After what has been labeled a’ disastrous’ jobs report on Friday when only 142,000 job increases were reported against a 200,000 expectation the gold price leapt $25 in 15 minutes in New York despite there being no physical gold purchases into the two U.S. based gold ETFs. [This leaves the holdings of the SPDR gold ETF at 689.204 tonnes and 160.65 tonnes in the Gold Trust.]
After the jobs report the dollar immediately fell two cents against the euro although the gold price in the euro also rose €20 at the same time. With little gold actually traded we see just how large the influence of COMEX and dealers in gold is in the market place where demand and supply are almost ignored. The same is true in the silver market. As we have pointed out in our newsletter before, it will take the arrival of the Shanghai gold price setting to change the pricing of gold. With a Chinese physical price and a New York ‘COMEX’ price moving away from each other, arbitrageurs will trade between the two smoothing out price differential. This will cause a structural change in the gold price. The ‘Yuan Gold Fix” is scheduled to begin before the end of the year.
With China still closed, we did expect attempts to crush the gold price through small physical selling, but the jobs report appears to have put paid to that now. The Technical picture is now moving to a critical point which may see a strong move this week.
The jobs report has made a re-appraisal of the future state of the U.S. and global economies necessary. If such reports continue to disappoint, it is certain financial markets will become even more volatile. While equity markets rose today, it was not on the prospects of a rosy future, but because better yields in equity markets against those in fixed interest markets will continue for the
next two or three months. Deleveraging will slow and the threat of more turmoil remains when interest rates eventually do rise.
Silver is rose a remarkable 68 cents on little trade in the Silver Trust, as dealers whipped prices higher to protect themselves.