Holiday over: U.S. will drive gold and silver prices, but in which direction?

Gold TodayGold closed in London at $1,344.90 on Monday after Friday’s New York close at $1,343.70.  In Asia the gold price stayed in line with London’s gold price, also adjusting for a weaker Yuan.  

  • The $: € slipped to $1.1156 down from $1.1124.
  • The dollar index moved lower to 95.54 from 95.73 yesterday.
  • The Yen was stronger again at 101.70.
  • The Yuan was almost unchanged at 6.6661 from 6.6663 on Monday.

Yuan Gold Fix

Trade Date Contract Benchmark Price AM Benchmark Price PM
2016  07  5

2016  07  4







Dollar equivalent @ $1: 6.6673

$1: 6.6600





Shanghai pulled the gold price back ahead of New York’s re-entry after Independence Day to a level not far from the close of last Thursday.

We do expect a ‘shunt’ effect in New York as the three global gold markets return to a common view on the gold price. We expect the view that caused New York to take gold and silver prices higher on Friday, ahead of the long weekend; will return to move prices up today.

The Yuan continues to weaken, as the Yen strengthens.  

Japan would be in deep trouble if it were not for the fact that its creditors are mainly its own citizens. Japan is in deflation’s vice like grip even after massive Q.E.

Once again, against all expectations, the dollar is holding close to the same levels as it has done for the last week.  In view of the warnings on Brexit it is remarkably steady.

LBMA price setting:  $1,344.75 up from Monday 4th July’s $1,348.75.

The gold price in the euro was set at €1,206.49 down €5.11 from Monday’s €1,211.60.

With New York returning for business today, the gold price ahead of its opening stood at $1,347.65 and in the euro at €1,209.14.  

Silver Today –The silver price closed in London on Monday at $19.85.  With New York returning today they will find the silver price hardly changed at $19.79.

Price Drivers

New York returns to see silver higher so expect a ‘shunt’ effect from the market. We usually see U.S. investors buy on the rise. With the return and seeing silver prices higher, we expect them to join the fray.

Gold may well pause and consolidate for a short time, before a strong move higher, as investors contemplate the Technical picture [which is looking good!


When the ‘gold Season’ starts again in India in September, we now expect strong demand from the sub continent because the monsoon is now covering almost all of India, a prerequisite for high Indian gold demand.

Gold ETFs – With the U.S. closed yesterday the holdings of the SPDR gold ETF were unchanged with its holdings at 953.914 tonnes and the holdings of the Gold Trust at 208.17 tonnes. We don’t expect these to rise again today as the gold price has corrected a little and points higher.

Since January 4th this year, the holdings of these two gold ETFs have risen 365.298 tonnes. Until the ‘gold season’ starts in September, ETF demand is the main driver of the gold price.

Silver –Silver prices may well run ahead of gold as U.S. investors, who closed positions last Friday, re-open them on the long side. With the U.S. the prime driver of the silver price we expect them to jump in on the upward train.

We bear in mind that silver is a much smaller market, with a tonne of silver costing $643,000 against a tonne of gold at $43.404 million. Consequently, it is much more volatile.

Julian D.W. Phillips | | StockBridge Management Alliance [Gold Storage geared to avoid its confiscation]

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