Gold – Facing a Critical Day

 Gold Today –New York closed at $1,246.20 yesterday after closing at $1,247.80 on the 22nd March. London opened at $1,243.00 today. 

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

         The $: € was weaker at $1.0798: €1 from $1.0787: €1 yesterday.

         The Dollar index was weaker at 99.73 from 99.77 yesterday. 

         The Yen was slightly weaker at 111.20:$1 from yesterday’s 111.15 against the dollar. 

         The Yuan was weaker at 6.8877: $1, from 6.8860: $1, yesterday. 

         The Pound Sterling was unchanged at $1.2490: £1 from yesterday’s $1.2490: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    3    24

     2017    3    23       2017    3    22










$ equivalent 1oz @  $1: 6.8877

      $1: 6.8860

$1: 6.8845







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 volatile between 277.6 and 278.6 Yuan, but standing at Yuan 278 as we wrote this, which directly translates into $1,255.39. But allowing for the difference of gold being traded this equates to a price of $1,250.39. This more than $9.19 higher than the New York close and $12.39 higher than London.

LBMA price setting:  The LBMA gold price was set today at $1,244.00 from yesterday’s $1,247.90.  

The gold price in the euro was set at €1,151.53 after yesterday’s €1,156.75.

Ahead of the opening of New York the gold price was trading at $1,245 00 and in the euro at €1,153.15 At the same time, the silver price was trading at $17.62. 

Silver Today –Silver closed at $17.58 at New York’s close yesterday against $17.53 on the 22nd March.

Price Drivers

It looked as though gold had broken through $1,250 before the opening of New York yesterday, but this was not to be, so it seems. Overhead resistance kicked in again at $1,250. So what lies ahead in the next few days for gold?

  1. The first is the monthly options expiry which demonstrates the net long or short position of the paper market. In itself, in the short term, it does influence prices. At the moment the longs seem to be better weighted implying higher prices.
  2. The Healthcare Bill is not just about healthcare or about Donald Trump but about the ability of the Republican majority to turn what has been political gridlock for the last two terms into decisive government. If the bill fails to pass today, it implies that despite the hype about President Trump’s ‘get things done’ ability, the government remains in political gridlock, with the majority disunited. That implies a lower dollar, lower equities [where the rise since his election accounts for 14% of the rise in the Dow] and higher gold.

Either way these two factors go, will see the gold price move strongly, one way or the other.

And that’s ignoring one of Italy’s Finance minister’s call that if Marie le Pen wins the French Presidency the E.U. will fall apart and the euro will collapse.  But then politics is always dramatic full of sound and fury….

So today is critical for all financial markets and for the ability of President Trump ‘to make America great again’.

Gold ETFs – Yesterday saw no purchases or sales into or from the SPDR gold ETF but a purchase of 0.3 of a tonne into the Gold Trust.  Their respective holdings are now at 834.396 tonnes and 198.72 tonnes. 

Since January 4th 2016, 232.086 tonnes of gold have been added to the SPDR gold ETF and to the Gold Trust.  Since January 6th 2017 22.03 tonnes have been added to the SPDR gold ETF and the Gold Trust.

 Julian D.W. Phillips – | | StockBridge Management Alliance 


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