Gold only sensitive to exchange rates and ETF movements for now

Gold TodayGold closed in New York at $1,343.40 on Monday after Friday’s close at $1,341.00.  London opened at $1,341 again.

    • The $: € was at $1.1335 with a wide spread, from $1.1305.
    • The dollar index was at 94.39 from 94.64 Monday.
    • The Yen was at 100.15 from Monday’s 100.48 against the dollar.
    • The Yuan was weaker at 6.6447 from 6.6540 Monday.


  • The Pound Sterling was at $1.3184 from Monday’s $1.3144.


Yuan Gold Fix

Trade Date Contract Benchmark Price AM Benchmark Price PM
2016  08  23

2016  08  22







Dollar equivalent @ $1: 6.6447

$1: 6.6540





All global gold markets, together with global currencies seem to be moving sideways today.

The Yuan is trying to hold onto the 6.65 area, we presume because we are about to enter the month in which if finally becomes one of the currencies making up the S.D.R.  Thereafter we expect any restraint on the Yuan going weaker [gently] will be lifted.

The dollar, at the same time, continues to show a slightly weakening trend holding at lower levels.

LBMA price setting:  $1,338.50 after Monday 22nd August’s $1,334.30.

The gold price in the euro was set at €1,181.69 down €7.51 from Friday’s €1,189.80.

Ahead of the opening in New York the gold price stood at $1,341.65 and in the euro at €1,183.17.  

Silver Today –The silver price closed in New York at $18.99 on Monday down from $19.75 on Friday.  Ahead of New York’s opening the price was trading at $19.03.

Price Drivers

The market in gold remains sensitive to exchange rate moves and to purchases and sales in the gold ETFs There is little else of substance to move these prices currently.

Janet Yellen is due to speak today, but is expected to remain dovish on rate hikes. Hence the better tone in the gold market.

China has been given the OK to issue an S.D.R. bond, purchasable in Renminbi only, by the World Bank. This new bond issuance is 2 billion SDRs which is equivalent to $2.8 billion.

The precise timing of issue and individual bond terms will be based on favorable market conditions, at the time of issuance.

This is a bold move and one aimed at further internationalization of the Yuan.  It will also make the IMF very happy as the S.D.R. has not been credible money in use widely, itself. By issuing only in the Renminbi any international investor must purchase the Yuan. And this is China’s aim, to widen the use of the Chinese currency as far as possible.

Gold ETFs – In New York on Monday there were purchases of 2.375 tonnes into the SPDR gold ETF (GLD) but no change in the holdings of the iShares Gold Trust (IAU). This left their respective holdings at 958.369 tonnes and 223.85 tonnes.

Silver –Silver prices now holding around $19.00 and will remain sensitive to even small moves in the gold price.

Julian D.W. Phillips | | StockBridge Management Alliance

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