|Gold Today –New York closed at $1,219.80 yesterday after closing at $1,227.20 yesterday. London opened at $1,222.00 today.
Overall the dollar was stronger against global currencies, early today. Before London’s opening:
– The $: € was stronger at $1.0872 after yesterday’s $1.0904: €1.
– The Dollar index was slightly stronger at 99.43 after yesterday’s 99.34.
– The Yen was weaker at 113.95 after yesterday’s 113.74:$1.
– The Yuan was stronger at 6.9040 after yesterday’s 6.9064: $1.
– The Pound Sterling was stronger at $1.2969 after yesterday’s $1.2926: £1.
Yuan Gold Fix
The Shanghai Gold Exchange was trading at 275.60 towards the close today. This translates into $1,236.62. New York closed at a $16.82 discount to Shanghai’s close yesterday. London opened at a discount of $14.62 to Shanghai’s close today.
Today is one of those days when we can see just where pricing power lies. New York has tried to pull prices back well below support, hitting $1,216 at one point. Shanghai took prices higher today in their consolidation process, but London moved in line with New York last night.
How New York and London perform today becomes critical. If Shanghai falls, then pricing power sits in London and New York, today.
LBMA price setting: The LBMA gold price was set today at $1,222.95 from yesterday’s $1,225.15.
The gold price in the euro was set at €1,125.02 after yesterday’s €1,124.09.
Ahead of the opening of New York the gold price was trading at $1,223.65 and in the euro at €1,125.51. At the same time, the silver price was trading at $16.28.
Silver Today –Silver closed at $16.15 yesterday after $16.28 at New York’s close yesterday.
The gold price continues to consolidate around $1,220 support. New York tried to take it lower but Shanghai is holding higher levels. With London following New York today we are at a critical juncture for the gold price. If it convincingly breaks down below current levels, strongly, it is bad news for the gold market in the short term. If it rises it will be signifying that the current pattern being formed is positive for the gold price.
The fundamentals of strong Asian demand and a weak dollar are positive for gold despite it moving with the dollar, down recently. It comes back to who controls the gold price?
As we said yesterday we are soon to see a strong move, either way. We can’t be more precise than ‘soon’. The fundamentals certainly point to higher prices, but have been doing so all the way through the fall of late.
Across the financial world volatility levels have fallen to extremely low levels. In this almost blithe atmosphere realities are almost being ignored. Equity markets are at record levels, higher than they should be according to their earnings levels and bond yields far too low given the size of global debt. Granted, the U.S. economy is looking healthy, but not so healthy as to see wages rise. Europe is starting to give evidence of growing economies and China is looking healthy. This is when investors take a longer view and realize that the best is here and not, ‘still to come’. A lot of global uncertainties have dissipated this year [in the E.U., with France electing macron, a pro-EU centrist, etc], but markets have discounted much of this. But few look around and say the future is rosy.
History tells us that this is the sort of investment climate when the markets are close to their tops and the selling starts. One should be contemplating a defensive portfolio.
Gold ETFs – Yesterday saw no change in the SPDR gold ETF (GLD) or the Gold Trust (IAU). Their holdings are now at 851.891 tonnes and at 201.69 tonnes respectively.
Since January 4th 2016, 252.227 tonnes of gold have been added to the SPDR gold ETF and to the Gold Trust. Since January 6th 2017 42.171 tonnes have been added to the SPDR gold ETF and the Gold Trust.
Julian D.W. Phillips
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