Gold stronger today in all currencies

 Gold Today –New York closed at $1,232.60 on the 15th February after closing at $1,227.40 on the 14th February. London opened at $1,238.00 today.

 Overall the dollar was weaker against global currencies early today. Before London’s opening:

         The $: € was stronger at $1.0627: €1 from $1.0572: €1 on yesterday.

         The Dollar index was weaker at 100.80 from 101.29 on yesterday. 

         The Yen was stronger at 113.70:$1 from yesterday’s 114.47 against the dollar. 

         The Yuan was stronger at 6.8603: $1, from 6.8694: $1, yesterday. 

         The Pound Sterling was stronger at $1.2494: £1 from yesterday’s $1.2457: £1.

Yuan Gold Fix

Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    2    16

     2017    2    15

      2017    2    14










$ equivalent 1oz @  $1: 6.8603

      $1: 6.8694

$1: 6.8681







Please note that the Shanghai Fixes are for 1 gm of gold. From the Middle East eastward metric measurements are used against 0.9999 quality gold. [Please note that the 0.5% difference in price can be accounted for by the higher quality of Shanghai’s gold on which their gold price is based over London’s ‘good delivery’ standard of 0.995.]

 Shanghai was trading at 274.40 Yuan towards the close today. This equates to $1,239.08, but allowing for the different quality of gold being traded [.9999 fineness]. As you can see Shanghai is leading the way over London and New York but only slightly now.

Thus  Shanghai is once again leading the way higher and pulling other markets with it. But the differential between the global gold markets is only slight now.

In 2016 China consumed close to 2,000 tonnes of gold, mostly drawing it off from the west.

LBMA price setting:  The LBMA gold price was set today at $1,236.75 up from yesterday’s $1,225.15.  

The gold price in the euro was set higher at €1,163.67 after yesterday’s €1,161.22.

Ahead of the opening of New York the gold price was trading at $1,237.40 and in the euro at €1,164.01.  At the same time, the silver price was trading at $18.06. 

Silver Today –Silver closed at $17.97 at New York’s close yesterday against $17.94 on the 14th February

Price Drivers

The dollar rises seen in the last few days, are largely due to speculative, emotional, positioning punting a bullish picture for the dollar. Yes, the superficial view of the factors pointing to a strong dollar, such as higher interest rate differentials coming, more potential dynamic growth and potential cash inflows from repatriated funds look positive for the dollar. But we cannot ignore the desire of the Fed and Treasury to see a weaker dollar for the sake of U.S. international trade.

Yesterday we said, “We are watching the dollar carefully to see if it does jump or be contained at these or lower levels. This will point the way forward in the U.S. to its gold price.” And the day after it slipped again. It is at a critical juncture where it can go either way in the near term.

What does appear to be happening is that uncertainties across the world are worrying investors and they are being seen to favour gold investments. Here we are talking about directly held gold bullion under the control of the investor, not ‘electronic gold’. This demand is growing, as reported by our friends in Swiss refineries, etc, who continue to be going flat out refining gold into metric formats for trading in markets in Switzerland and eastwards. It is most enlightening to hear that such Swiss gold people are not at all happy to receive dollars in payment, only euros or Swiss Francs. This tells quite a story!

Gold ETFs – Yesterday we purchases of 2.667 tonnes into the SPDR gold ETF and o.74 of a tonne into the Gold Trust.  Their respective holdings are now at 843.539 tonnes and 202.03 tonnes.  We focus only on these two ETFs as they represent U.S. gold demand well, but the total increase in global ETFs is around 51 tonnes in the last 10 days.

Since January 4th 2016, 244.959 tonnes of gold have been added to the SPDR gold ETF and to the Gold Trust.  Since January 6th 2017 34.878 tonnes have been added to the SPDR gold ETF and the Gold Trust.

Julian D.W. Phillips | | StockBridge Management Alliance 

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