SGE Yuan Gold Fix Starts Tomorrow; GLD Purchases resume

Price Drivers

The long awaited Doha meeting of oil producers failed to produce the result the markets had banked on. With oil prices now promising to fall further and Iran increasing production as fast as it can, there is little hope of oil prices rising this year. Consequently, the markets are falling across the globe.

Both the dollar and the euro continue to remain at last week’s levels in quiet markets. Gold is trying to rise as uncertainties levels have jumped after Doha. We expect gold to trade in a narrow range at least in the early part of the week.

Tomorrow we see the start of the Yuan Gold Fixing in Shanghai. To get the price in dollars, one will have to take the SGE gold price and multiply it by 32.1507465 to get a price per ounce. Then divide this price by the $: Yuan exchange rate at the time of the Fix.

Gold ETFs – We saw more large purchases of 5,647 tonnes, after last week’s big sales of over 8 tonnes, of gold into the SPDR gold ETF but nothing in or out of the Gold Trust on Friday. This leaves their holdings at 812.462 and 188.04 tonnes in the SPDR & Gold Trust respectively.  These purchases were well placed to take advantage of what we expect later this week in the gold price.

Silver – The silver price is marking time waiting to run at the first sign of small recovery in the gold price.

Julian D.W. Phillips | | StockBridge Management Alliance


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