Gold traders attacking triple top

Gold Today –New York closed Friday at $1,294.00. London opened at $1,282.75 today. 

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

         The $: € was weaker at $1.1799 after the Friday’s $1.1754: €1.

         The Dollar index was weaker at 93.33 after Friday’s 93.47

         The Yen was weaker at 109.76 after Friday’s 109.09:$1. 

         The Yuan was weaker at 6.6691 after Friday’s 6.6672: $1. 

         The Pound Sterling was slightly stronger at $1.2995 after Friday’s $1.2975: £1

Yuan Gold Fix
Trade Date     Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    8    12

     2017    8    11           

     2017    8    10







Trading at 277.25



$ equivalent 1oz at 0.995 fineness

@   $1: 6.6691

       $1: 6.6672

       $1: 6.6594     




Trading at $1,287.77



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.]

 New York closed $7.00 higher than Shanghai’s close yesterday. Then today sees Shanghai lifting the gold price again. But London pulled it down $6 lower. London and Shanghai see the gold price differently with London being more volatile that Shanghai as you can see above. Shanghai still needs to take gold above $1,300 for the gold price to run higher.

As we said on Friday, “Today and next week become important days for the gold price. It is also the time when North Korea said they would fire a missile towards Guam!”

Silver Today –Silver closed at $17.07 yesterday after $17.06 at New York’s close Wednesday.

LBMA price setting:  The LBMA gold price was set today at $1,281.10 from yesterday’s $1,288.30.  The gold price in the euro was set at €1,085.86 after yesterday’s €1,095.59.

Just before the opening of New York the gold price was trading at $1,282.60 and in the euro at €1,087.23. At the same time, the silver price was trading at $17.02. 

Price Drivers

We are amazed today to find that, fears of war with North Korea are almost off the table and markets are calmed because of it. We looked round to see if these assumptions were due to the North Korean President saying something along the lines that he will not fire the missile towards Guam? No, he hasn’t said anything! Did President Trump say anything? No! But U.S. officials said nuclear war is not a danger. It’s time for a reality check we think and ask, which ‘Officials” are in a position to counter both Presidents?  Hence we do not see the market calmness as a result of these official’s statements. We see the market calmness simply calm after the dramas of last week that could easily change back to heightened fears in a heartbeat.  But also as we said last week, we do not accept that gold rose on war fears, it was because of the dollar’s ongoing weakness and Asian demand.

But if a missile is fired by North Korea towards Guam then the whole set of global financial markets changes. Gold will certainly rise on war fears then.

But the failure of inflation to rise, alongside disappointing wage pressures is assisting gold’s rise outside of China, where demand is proving a constant. Now add to that a toppy equity market in the U.S. and we could see moves out of equities into gold as well. These elements are not quickly passing features of the financial world. It is on these that the gold price is rising. All this is happening ahead of the start of the ‘Gold Season’ which starts in a couple of weeks from now!

We see the gold price pulling back today because traders are attacking the ‘triple top’ that is in the Technical picture. The week could prove volatile!

Julian D.W. Phillips – | StockBridge Management Alliance 


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