Gold and silver prices steady in the euro weak in the dollar  

Gold TodayGold closed in New York at $1,346.10 on Tuesday after Monday’s close at $1,339.40.  London opened at $1,341.

    • The $: € was almost unchanged at $1.1262 from $1.1268.
    • The dollar index was almost unchanged at 94.96 from 94.94 Tuesday.
    • The Yen was slightly weaker at 100.76 from Tuesday’s 100.25 against the dollar.
    • The Yuan was weaker at 6.6330 from 6.6270 Tuesday.
  • The Pound Sterling was slightly stronger at $1.3014 up from Tuesday’s $1.2934.

Yuan Gold Fix

Trade Date Contract Benchmark Price AM Benchmark Price PM
2016  08  17

2016  08  16







Dollar equivalent @ $1: 6.6330

$1: 6.6270





Again Shanghai was higher than New York’s closing but London decided to walk its own road at the opening, opening lower at $1,341. The reason London pulled gold prices down before the opening in London was the continuing ‘strength of the euro/weakness of the dollar, as you can see in the euro gold prices below.

LBMA price setting:  $1,342.75 after Tuesday 16th August’s $1,349.10.

The gold price in the euro was set at €1,191.65 down €5.32 from Tuesday’s €1,196.97.

Ahead of the opening in New York the gold price stood at $1,343.75 and in the euro at €1,197.42.  

Silver Today –The silver price closed in New York at $19.80 on Tuesday down from $19.81 on Monday.  Ahead of New York’s opening the price was trading at $19.68.

Price Drivers

Yesterday saw more tonnage bought into the U.S. gold ETFs, but this had no effect on gold prices.  Gold had hit $1,354 during the day in both London and New York, but pulled back on little to no selling volume thereafter. It is reported that Stanley Drukenmiller has sold his holdings of SPDR gold ETF Call Options and this after his condemnation of the actions of central banks, justifying holding gold in May, not so long ago. We doubt he would have exited gold after that position statement.  More likely he would have found another way to hold gold. We would have expected him to change to allocated gold in physical form, if he was a serious long-term holder.

After all the SPDR gold ETF shareholders [which is what you buy when you buy into the ETFs] don’t own gold, the company owning SPDR does. And that rather defeats the purpose of owning such holdings. After all if central banks get into trouble one of the most likely sources of gold for them lies in SPDR gold holdings. So, it makes far more sense to own the gold directly out of reach of central banks in an allocated form [just holding it outside the country is insufficient to protect from confiscation] as no doubt Mr. Drukenmiller knows.

The market appears to be holding back ahead of the publication of the Minutes from the last Fed meeting for signs that a rate hike is in prospect. The markets have indicated that there is a 50% chance of a rate hike in December, not September, this year. But productivity in the U.S., a major factor in the decision remains at low levels and current data has been weak. As we said last yesterday, “On several fronts, developed world and emerging world bonds, equity markets and on the currency front, any lifting of U.S. interest rates would catapult these markets down, while the dollar would be catapulted higher. So the weight of responsibility on the U.S. Fed grows by the day. We at Gold Forecaster do not expect such a rise in rates for a long, long time because of this risk.”

Gold ETFs – In New York on Tuesday there were purchases of 1.781 tonnes into the SPDR gold ETF (GLD) and 0.96 of a tonne into the Gold Trust (IAU). This left their respective holdings at 962.228 tonnes and 223.85 tonnes.

Silver –Silver prices stumbled heavily pulling back from $20 to the mid-$19. Should gold rise through $1,360 you will see silver run ahead well over $20.

Julian D.W. Phillips | | StockBridge Management Alliance

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