Gold: $1,250 resistance becoming support

 Gold Today –New York closed at $1,256.70 on the 24th February after closing at $1,248.80 on the 23rd February. London opened at $1,255.00 today.

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

         The $: € was slightly stronger at $1.0586: €1 from $1.0589: €1 on Friday.

         The Dollar index was slightly stronger at 101.06 from 100.95 on Friday. 

         The Yen was slightly stronger at 112.30:$1 from Friday’s 112.85 against the dollar. 

         The Yuan was weaker at 6.8800: $1, from 6.8717: $1, Friday. 

         The Pound Sterling was weaker at $1.2412: £1 from Friday’s $1.2553: £1.

Yuan Gold Fix

Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    2    27

     2017    2    24

      2017    2    23










$ equivalent 1oz @  $1: 6.8800

      $1: 6.8717

$1: 6.8786







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.]

 At the close in Shanghai today, the gold price was trading at 280.0 Yuan, which directly translates into $1,265.84. But allowing for the difference of gold being traded this equates to a price of $1,260.84. This is $4 higher than the New York close and $6 higher than London.

Shanghai opens the week pulling both London and New York higher again but with the two centers following close behind.

LBMA price setting:  The LBMA gold price was set today at $1,256.25 up from Friday’s $1,255.35.  

The gold price in the euro was set higher at €1,187.05 after yesterday’s €1,185.02.

Ahead of the opening of New York the gold price was trading at $1,255.20 and in the euro at €1,185.94.  At the same time, the silver price was trading at $18.37. 

Silver Today –Silver closed at $18.35 at New York’s close Friday against $18.18 on the 23rd February.

Price Drivers

Looking back over the last week, we see only purchases of 0.44 tonnes of gold into the U.S. based gold ETFs. This confirms to us that the upward pressure on the gold price is coming from the Far East, primarily Shanghai.

This is remarkable as the gold price has risen around $20 in the same period, breaking through persistent overhead resistance on the way.It clearly shows that U.S. factors and U.S. buying has not provided the upward pressure on the gold price and confirmed our view that it has been upward pressure from Shanghai.

Political uncertainty is certainly preventing any selling in the developed world as we move towards the Dutch, French and German elections. Italy is looking like a major source of such uncertainty too.

Gold ETFs – Friday again saw no sales or purchases from or into the SPDR gold ETF or the Gold Trust.  Their respective holdings are now at 841.169 tonnes and 201.82 tonnes. 

 Julian D.W. Phillips | | StockBridge Management Alliance 


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