Gold and the dollar: Plodding along

Gold Today –New York closed at $1,267.00 yesterday after closing at $1,267.00 yesterday. London opened at $1,267.00 today. 

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

         The $: € was weaker at $1.1222 after yesterday’s $1.1179: €1.

         The Dollar index was weaker at 97.17 after yesterday’s 97.40

         The Yen was weaker at 111.15 after yesterday’s 110.84:$1. 

         The Yuan was much stronger at 6.8062 after yesterday’s 6.8180: $1. 

         The Pound Sterling was stronger at $1.2855 after yesterday’s $1.2791: £1.

Yuan Gold Fix
Trade Date     Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    6    1

     2017    5    31

     2017    5    30







On holiday


Trading at 279.0


On holiday


$ equivalent 1oz at 0.995 fineness

@    $1: 6.8062

       $1: 6.8180

       $1: 6.8615     





On holiday



Trading at $1,266.76


On holiday


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.]

 While the Yuan price of gold continues to dip a little and the Yuan continues to strengthen, Shanghai is now leading the gold price, in New York and London a little weaker, alongside a weaker dollar.

The pattern usually seen in London and New York is for the gold price to go in the opposite direction to the dollar. Because of Shanghai’s influence this pattern is being broken, at the moment.  But we do not read too much into this as the moves in the gold price are too small to be conclusive.

Shanghai was trading today at slightly less than a $1 below New York’s close and London’s opening.

Global currency and gold markets continue relatively calm, with the exception of the Yuan which continues to go much stronger as the People’s Bank of China intervenes in the market place.

Silver Today –Silver closed at $17.32 yesterday after $17.41 at New York’s close.

LBMA price setting:  The LBMA gold price was set this morning at $1,266.15 from yesterday’s $1,263.80.  The gold price in the euro was set at €1,128.58 after yesterday’s €1,127.08.

Ahead of the opening of New York the gold price was trading at $1,266.45 and in the euro at €1,128.64. At the same time, the silver price was trading at $17.14. 

Price Drivers

The dollar continues to weaken slightly and the gold price in the dollar to rise, as it is doing in all currencies except the Yuan. The Technical picture shows that it is above resistance but has not yet run as it would have done in the past. Instead it is showing a steady plod with higher lows and higher highs. As we have been pointing out in the Shanghai section above, the influence of Shanghai on the gold price is visible. Its slow plod higher, we see, as evidence of Chinese price dominance at the moment.

If this is correct, we expect the steady plodding of the gold price to continue without those steep spikes much higher or lower. Instead, we expect to see the gold price show lower volatility going forward but a solid direction to be confirmed by such price action.

Stronger than expected U.S. jobs figures released today brought gold and silver prices down a few notches.

Gold ETFs – Yesterday, saw no sales or purchases of gold to or from the SPDR gold ETF. The internet page of the Gold Trust was a wrong page, so we cannot report on yesterday’s activity in that ETF. Their holdings are now at 847.452 tonnes and we presume, at 202.97 tonnes respectively.

Julian D.W. Phillips | | StockBridge Management Alliance 


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