Gold ETFs, Big correction in gold, silver, pgm prices, China’s latest gold reserve figures – only a small increase

My latest articles on the website look at the goings on in precious metals markets, the rise and rise in gold ETFs and China’s not so big latest gold reserve increase.  Click on the titles to read full articles:

A WGC analysis of global gold ETFs shows that they are near levels last seen in 2012 when they were at a record. This indicates that the big money is again investing in gold amid nervousness of an equities market meltdown.

Big correction in gold, silver and platinum. Equities recover.

 Precious metals prices suffered a major correction on Thursday and Friday after flying high at the beginning of the trading week. Equities picked up strongly after major falls earlier.

China says it only adds 5.9 tonnes of gold to reserves in August

The Peoples Bank of China reports adding only 5.91 tonnes of gold to its reserves in August – the lowest monthly addition since it restarted reporting monthly gold reserve increases in December last year


WORLD GOLD COUNCIL : Global gold-backed ETF flows are now positive in 2018

Holdings in global gold-backed ETFs and similar products rose in November by 21.2 tonnes(t) to 2,365t, equivalent to US$804mn in inflows, marking the second consecutive month of net inflows. Global gold-backed ETF flows are now positive in US dollar terms on the year.** The price of gold was little changed (+0.2%) and global assets under management (AUM) rose by 1.1% in US dollars relative to October.

**See note on tonnage/ flows differences below. ** 

Global stock markets remained volatile, although they ultimately ended the month mixed. Oil performance was a key story as the commodity fell more than 22% on the month amidst supply concerns. The US 2/10 Treasury yield curve flattened to near-low prices on the year as investors became concerned that US economic conditions may have peaked and could be showing potential for a recession in either 2019 or 2020. Long-dollar hedged gold is now higher on the year, rallying over 6% in Q3 with the improving gold and US dollar pricing.

November flows were positive across all regions. European funds led global inflows, with strong flows into UK-based funds as Brexit concerns increased and sterling weakened. North American funds saw inflows for a second straight month but remain negative on the year. Asian funds reversed two months of weak performance adding 2.3% to their assets.

Overall, gold trading volumes remained flat m-o-m, 10% below the y-t-d average. The LBMA announced a new reporting system for gold OTC trading volume (LBMA-i), which provides improved transparency into the liquidity of the gold market. Sentiment and positioning in COMEX futures remain bearish, well below historical averages. As discussed in our recent note Gold recoils amid selloff but may rebound, extreme bearish positioning in futures has historically preceded strong rallies in the price of gold.

Regional flows 

  • • Holdings in European funds rose by 10.5t (US$372mn, 0.9%)
  • • North American funds had inflows of 8.4t (US$353mn, 0.8% AUM)
  • • Funds listed in Asia increased by 2.1t (US$72mn, 2.3%)
  • • Other regions saw a small increase in holdings of 0.2t (US$7mn, 0.6%)

Individual flows 

  • • SPDR® Gold Shares led global inflows, gaining 7.7t (US$309mn, 1.1%), followed by iShares Physical Gold which gained 5.4t (US$207mn, 6.3%), and Gold Bullion Securities 2.1t (US$82mn, 2.7%)–both in the UK–as well as Huaan Yifu Gold, in China, which added 2.7t (US$104mn, 13.3%)
  • • Low-cost gold-backed ETFs in the US continue to add assets as strategic holders increase holdings***
  • • Funds with outflows were few but were led by Invesco Physical Gold, which lost 2.0t (US$ 78mn, 1.8%) and Bosera Gold, which was down 1.1t (US$45mn, 9.5%)

Y-t-d flows 

  • • Collectively, US dollar flows in gold-backed ETFs are now positive having raised US$354mn (40bps), despite the recent trend driven by a strong US dollar and bearish gold market sentiment**
  • • North America reported a second monthly inflow after six consecutive months of outflows but remain negative on the year by 50.0t (US$2.1bn, 4.6% AUM)
  • • By contrast, European funds continue to see net positive inflows with $2.9bn coming in (7.1% AUM) y-t-d
  • • After starting the year strong, Asian funds have given up all their gains and are now negative losing 1.5% of their assets y-t-d

**Note: We calculate gold-backed ETF flows both in ounces/tonnes of gold and in US dollars because these two metrics are relevant in understanding funds’ performance. The change in tonnes gives a direct measure of how holdings evolve, while the dollar value of flows is a finance industry standard that gives a perspective of how much investment reaches the funds. This month, the reported flows measured in tonnes of gold and their dollar value equivalent seem inconsistent across regions. Both figures are correct. The disparity due to the interaction between the performance of the gold price intra-month, the direction of the dollar, and the timing of the flows. For example, Europe experienced outflows early in the month when the price of gold was low but gained assets later in month when the price of gold increased. 

***Low-cost US-based gold backed ETFs are defined as gold-backed ETFs that trade on US markets with annual management fees of 20bps or less

Gold market volatility reducing?

Gold Today –New York closed at $1,247.80 yesterday after closing at $1,244.60 on the 21st March. London opened at $1,246.30 today. 

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

         The $: € was stronger at $1.0787: €1 from $1.0802: €1 yesterday.

         The Dollar index was unchanged at 99.77 from 99.77 yesterday. 

         The Yen was stronger at 111.15:$1 from yesterday’s 111.48 against the dollar. 

         The Yuan was weaker at 6.8860: $1, from 6.8845: $1, yesterday. 

         The Pound Sterling was stronger at $1.2490: £1 from yesterday’s $1.2472: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    3    23

     2017    3    22       2017    3    21










$ equivalent 1oz @  $1: 6.8860

      $1: 6.8845

$1: 6.8968







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 278.65 Yuan, which directly translates into $1,258.64. But allowing for the difference of gold being traded this equates to a price of $1,253.64. This more than $5.84 higher than the New York close and $7.34 higher than London.

You will note how Shanghai prices have been steady after jumping with London and New York’s ‘discounts’ narrowing a great deal. We attribute this to arbitrageurs or western dealers making sure their prices are not out of line. Why do we stress this? It shows the lessening impact of western new items and COMEX actions. It ensures that gold prices are more currency related. We believe it is already reducing the volatility in global gold markets.

LBMA price setting:  The LBMA gold price was set today at $1,247.90 up from yesterday’s $1,246.10.  

The gold price in the euro was set at €1,156.75 after yesterday’s €1,154.76.

Ahead of the opening of New York the gold price was trading at $1,251 35 and in the euro at €1,160.48 At the same time, the silver price was trading at $17.66. 

Silver Today –Silver closed at $17.53 at New York’s close yesterday against $17.52 on the 21st March. Silver prices will follow gold higher today.

Price Drivers

Over the last day gold prices have stabilized at just below $1,250 a point of overhead resistance that has turned the gold price back in recent weeks. It will move through $1,250 today.

As eastern demand is robust now with the Indian wedding season underway and Chinese demand picking up the gold price building strength is tackling $1,250 before more gains.  


Greece’s bailout story is back on stage as talks deadlocked between the Greek government and the E.U. Will we see a replay of the brinkmanship seen when the new government came in? By the very nature of the two, yes, we will. All expect Greece to cave in, in the end. But what is common in most money dramas across the world is that when drastic action is needed is that it comes when markets are closed at weekends, so governments can surprise their people before they can do anything. Right now as a precaution Greek depositors are withdrawing deposits so as not to be caught in a bail-in as happened in Cyprus.

Of course, they could presume that nothing will happen to the banks and do nothing. History is full of such victims. Likewise in the gold world, when structural changes come they are sprung on us so we are trapped.

Gold ETFs – Yesterday saw no purchases or sales into or from the SPDR gold ETF but a purchase of 0.6 of a tonne into the Gold Trust.  Their respective holdings are now at 834.396 tonnes and 198.42 tonnes. 

 Julian D.W. Phillips | | StockBridge Management Alliance 

Gold Price Gridlock. Where does it go next?

By Ross Norman*

What happens when an unstoppable force meets an immovable object ? The paradox is not meant for philosophic debate, but an intro to possibly explain the current gold price (in)action… and by extension, where it might be headed.

Gold saw a stellar rise in H1 2016 and has since tracked sideways, with price volatility falling to a two year low. It would be easy to blame the lacklustre price action upon economic policy uncertainty and what is increasingly looking like two increasingly divergent narratives about the course the economy is taking. We think there is a stalemate in play.

To get a view on the price outlook for the balance of 2016 one needs to consider who the protagonists involved in this stand-off are and how they are likely to behave.

The first point to make is that 2016 has been an epic year in terms of the scale and speed of the reverse flow of bullion. Chinese and Indian demand coupled with Central Bank buying dominated the demand-side over the previous 5 years but has slowed to a trickle, while the erstwhile sellers – the West – have turned buyers. Metal that had been flowing from Western central bank selling, institutional sales of ETFs and even cash-for-gold at a retail level through the Swiss refineries is now flooding back into the West.

Switzerland is the nexus for gold flows because of the large number of refineries operating there – and they convert the metal from a purity the Asians want (typically 99.99% purity and kilobar size) from the Western standard (typically 99.5% purity and 12.5 kg bars) – happily they also have reliable import-export data to aid market intelligence.

It would be tempting to imagine that all buying is equal – not so – some is “stickier” than others and herein lies the key issue.

The new Western buying has come from two key sources – about 500 tonnes of buying in the form of gold futures (OK leveraged paper and not physical) and the purchasing of 580 tonnes of gold ETFs in H1 much of which will have flowed into the nominated vault (usually HSBC London). This buying – as we learnt in 2011 when gold peaked at $1922 – is arguably of a much flakier nature than Asian buying. Futures traders typically hold for far shorter periods of time and are less concerned with market fundamentals. Many are long, sitting on a handsome profit and impatient. They are the ‘weak hands’ and in that environment it would be easy – and even healthy to see a good bout of profit-taking.

The buyers are the Asians, European investors and Central Banks ; they however are showing a greater level of patience – if the gold price dips they buy, but they are not going to chase it higher. This is a familiar approach that Indian traders would typically adopt but it seems to have extended into China and even the official sector behaviour. As such, we have seen modest price corrections which are often shallow and short-lived, suggesting the market is very well supported. We ourselves have a good number of physical clients here at Sharps Pixley looking to get in – but only at a lower price – we think this is not untypical.

Removing uncertainty over the US elections from this story, we would expect the impasse to continue for a while to come. The COMEX traders have shed about 15% of their positions from the peak and even the ETF buyers have indulged in some profit-taking. There is however quite a sizeable overhang of metal still to be absorbed by the ‘real’ market before we can expect the new direction to emerge in our view. All good things come to those that wait.

*Ross Norman, CEO Sharps Pixley

Ross started his business career with business guru Sir Clive Sinclair of Sinclair Research in Cambridge, before joining Johnson Matthey as Gold Refining Manager (then the worlds largest gold refiners), then as a gold trader at NM Rothschild & Sons (the Chairman of the London Gold Fixing) and later Credit Suisse, where he was a Senior Dealer in physical bullion trading.

Ross has an enviable record within the London Bullion Market in forecasting the gold price over the last decade and is frequently sought by the media for commentary on the bullion markets. Ross has made frequent appearances on TV (BBC, CNBC, CBC) in newspapers (FT. Wall Street Journal) as well as in the newswires (Reuters, Bloomberg and Dow Jones).

Gold and silver back to support as ‘gold season’ approaches

Gold TodayGold closed in New York at $1,336.40 on Friday after Thursday’s close at $1,358.10.  London opened at $1,330.

    • The $: € was up at $1.1096 from $1.1135.
    • The dollar index rose to 96.30 from 95.67 Thursday.
    • The Yen was weaker at 102.41 from Thursday’s 101.48 against the dollar.
    • The Yuan was weaker at 6.6616 from 6.6409 Thursday.


  • The Pound Sterling was weaker at $1.3042 down from Thursday’s $1.3297.


Yuan Gold Fix

Trade Date Contract Benchmark Price AM Benchmark Price PM
2016  08  8

2016  08  4







Dollar equivalent @ $1: 6.6616

$1: 6.6409





The Yuan lurched lower as the dollar strengthened after the excellent Jobs report on Friday. While the PB of C is cautious on moving the Yuan higher, they are finding the dollar strength should not become the Yuan’s strength.

LBMA price setting:  $1,330.00 after Thursday 4th August’s $1,351.15.

The gold price in the euro was set at €1,200.04 down €13.71 from Thursday’s €1,213.75.

Ahead of the opening in New York the gold price stood at $1,333.35 and in the euro at €1,202.84.  

Silver Today –The silver price closed in New York at $19.70 on Friday down from $20.41 on Thursday.  Ahead of New York’s opening the price was trading at $19.72.

Price Drivers

The excellent Jobs report on Friday of a 255,000 increase, well above estimates, has put a rate hike back on the table, some say for September with others saying not until December. We agree with experts like Bill Gross who states that Janet Yellen is very aware of the global picture. After all the U.S. economy is doing well, but is integrated into the global economy to the extent that the global economy can drag the U.S. economy down. The U.S. is the main global economy but is not nearly so strong as to drag the rest of the world up with it. But markets are reading it as having to power to do just that.

Consequently, gold and silver were pulled back to support on Friday. Bearing in mind the big tonnage bought into the SPDR gold ETF at the end of last week, the gold price was pulled back too far. With it now resting on support as the formation of a pennant shape is beginning, we expect bargain hunters to see the price as attractive now.

Has the Jobs report change future prospects of the U.S. and global economy? We feel more data is needed before one can come to such a conclusion. Deflation across the world remains a main concern for all nations, including the U.S. This swings the spotlight onto inflation. Inflation levels remain far too low leaving prospects for gold positive.

We are now only three weeks away from the start of the “Gold Season”!

Gold ETFs – In New York on Thursday/Friday there were purchases of 10.688 of a tonne bought into the SPDR gold ETF (GLD) and 0.75 of a tonne into the Gold Trust (IAU). This left their respective holdings at 980.336 tonnes and 220.40 tonnes.

Since January 4th this year, the holdings of these two gold ETFs have risen by 403.121 tonnes.

Silver –Silver prices have absorbed the Jobs report like gold and should recover today.

Julian D.W. Phillips | | StockBridge Management Alliance [Gold Storage geared to avoid its confiscation]


GFMS blows hot and cold on gold

The latest GFMS Gold Survey Update taking Q2 figures into account doesn’t make for particularly positive reading for the gold investor in terms of fundamentals, but nevertheless the consultancy has upped its average gold price forecast for the year from what looks to have been a rather low estimate of $1,184/ounce to what might seem a still relatively conservative $1,279/ounce.  It should be recognised, however, that this is an average price forecast for the full year, and despite the headline spot price currently heading for the $1,350 level after a downbeat US GDP assessment, the actual average for H1 is still some way below this at around $1,219 based on LBMA figures, so this still suggests a second half average of close to $1,340/ounce to achieve this kind of level for the whole of the year.  Perhaps not quite so conservative after all!

So why do we say that the fundamentals do not look quite so positive as the relatively upbeat survey title might suggest?  That is because of a remarkable estimated downturn in gold’s principal demand sector – jewellery manufacture, particularly in gold’s two largest markets, China and India.  GFMS does come in for some criticism on its Chinese consumption statistics in particular, largely because of its definition of what actually comprises demand.  This actually comes in way below known Chinese gold imports and even further below withdrawals from the Shanghai Gold Exchange (SGE) which the Chinese Central Bank defines as Chinese demand in its Gold Yearbook.  The discrepancy is in part because GFMS consumption statistics ignore some very substantial gold flows into the banking and institutional sector, purportedly for use in financial transactions, but we have surmised they may also provide a back-door, and unreported, addition to China’s gold reserves given the country’s commercial banks are all state-controlled.  Certainly gold flows into China in total are way in excess of GFMS-estimated Chinese demand figures.

For China so far this year, GFMS reckons Chinese jewellery demand is seen as down by 31% year on year – the worst Q2 performance since 2009.  Investment demand is also seen as falling by 12% quarter on quarter for Q2.  Overall GFMS describes Chinese demand, as it calculates it, as being in freefall, although it is anticipating a pick-up in Q3.

While SGE gold withdrawal figures will also be substantially higher than the GFMS definition of Chinese gold consumption – they too are down sharply year to date as well by around 17% – which certainly confirms the trend noted by GFMS, if not the size of the downturn. Up until the end of June some 973.1 tonnes of gold had been withdrawn from the SGE.  Analytical consultancies like GFMS believe SGE figures include a significant degree of double counting, although some other analysts who follow these figures disagree saying SGE rules prevent this.

Chinese demand may also indeed be beginning to pick up, despite media headlines which look to suggest the opposite.  Hong Kong remains the conduit for perhaps around 60% of gold imports into the Chinese mainland and the May figure was the best for five months at 101 tonnes.  June did see a fall back to 68.7 tonnes but theBloomberg report headlined China’s Gold Imports Slide in June as Rising Prices Deter Buyers, where the headline suggested a major downturn in Chinese imports, rather glossed over the fact that even so the June figure was still more than three times higher than the figure for June 2015 – and 2015 was a very strong year for Chinese gold imports and demand!  The SGE withdrawals figure for the year was a huge new record at just shy of 2,600 tonnes – equivalent to over 80% of global new mined gold output.

GFMS also saw Indian jewellery demand as being even worse with jewellery consumption down 56% – and even globally it sees overall jewellery consumption down 27.3%.  It also puts global industrial demand as down by 7%, net official sector purchases down 48.5% (due primarily to reduced purchases by Russia and China in H1 coupled with sales by Venezuela) and global retail investment demand off by 2.6% overall.  To make things worse, despite seeing a 2% fall in new mine supply, overall supply is estimated as growing by around 6% due to an increase in scrap sales brought on by higher prices, and an increase in gold hedging activity.

The one bright spark in the supply/demand fundamentals balance has been the huge inflow into gold ETFs, totalling an estimated 568 tonnes in the first half of the year, so while GFMS sees gold in a supply surplus over the period, it has not been nearly such a severe one as the other supply/demand statistics might suggest.  But what if the ETF inflows start to reverse as they have been over the past week or two?  The likelihood could be a summer slump in the gold price, unless some global black swan event intervenes to regenerate more safe haven demand.  Or can sentiment alone hold the gold price at around current levels?  The FOMC meeting this week saw no indication of any timetable for increasing US interest rates, which gave the gold price a strong boost.  The latest US GDP growth  figures have also come in way below expectations, which may dim further expectations of a September US interest rate increase – and the feeling is the Fed won’t want to rock the boat ahead of the US Presidential election, which will likely see any interest rate rise decision to be postponed until December at the earliest.

What positives for gold does GFMS see?  It is now reckoning that new mined gold supply is definitely on the downward path.  There are relatively few new projects and expansions expected to begin producing this year to replace old mines closing down or those seeing lower grades, and those new operations in the near-term pipeline are generally fairly modest in scale, hence an opinion that global mine supply is now set to begin a multi-year downtrend this year.  But even if mine supply were to fall by 10% next year, which is probably a hugely excessive guess (the more likely figure would be 2-3%), this would only take 300 tonnes or so out of the global picture and unless Asian demand picks up again we could be heading for quite a major surplus.

But, even so, GFMS has raised its price projections as noted above, which means perhaps its analytical team is a little more positive than its figures might suggest.  It puts this down to political uncertainties ahead including the ongoing impact of the Brexit vote in the UK, reduced expectations of a rate rise from the Fed, a wobbly Italian banking sector and the U.S. Presidential race.

The full GFMS Q2 Gold Survey update is available for download to corporate email addresses at

The above article is a lightly edited and updated version of one published earlier this week on 

UK economy could start to pick-up as Brexit fearmongers change tune

Well, some economic indicators – notably the parity of the pound sterling against the U.S. dollar – have tanked since the British public voted to withdraw from the European Union.  Conversely the FTSE 100 larger companies stock market Index has risen quite sharply, as has the FTSE All-Share Index.  The FTSE 250 index, though, which includes the better mid-cap companies, and is perhaps seen as more representative of UK industry as a whole, did fall sharply, is now beginning to recover, but is still around 8% down on the immediate pre-Brexit vote peak when it was widely believed, at least among financial circles, that the Remain vote would win the day.

But just as there are signs that even the FTSE 250 Index may be beginning to pick up there are also signs that the pound sterling may have bottomed.  These movements one way or the other are usually overdone on the immediate aftermath of a momentous decision like that to Brexit.  And, as we pointed out here beforehand in our article: Britain reaping the whirlwind of Remain campaign ‘project fear’ rhetoric sentiment is still suffering from the almost certainly strongly exaggerated statements from much of the political and financial establishment (who were mostly campaigning to remain in the EU) of how much the UK economy was likely to suffer from an exit vote.  Many of these same figures are now needing to attempt to begin talk the economy up again.  While their reversals of stated opinions may somewhat dent their credibility, some of this new found optimism among pre-vote naysayers may well strike home and at least prompt some sort of recovery – probably not to pre-Brexit vote levels but at least part way.  Whether any global benefits of UK ‘independence’ from Europe as promoted by the exit campaigners will come about is a little more difficult to assess, but there is probably truth in at least some of these assessed positive advantage of a break from the EU!

One of the other beneficiaries so far of the Brexit vote has been gold, and in pound sterling terms the gain has been quite spectacular, as we had forecast here ahead of the vote, but has this been overdone on the upside?  Those who invested in gold in the pound sterling pre-Brexit might want to take a look at taking some profits now that markets are likely to settle down.  Not necessarily sell all as we still see some positivity for precious metals ahead, but these investments will have been excellent wealth protectors and it may well be worth banking some of the gains.

There is something of a consensus out there that gold (and silver) may now go through a consolidation period before starting to rise again.  Bank analysts, though, still seem to be falling over themselves to predict higher prices by year end.  But be warned, these are the same people who, at the turn of the year, were predicting often substantial precious metals price weakness ahead – gold at $1,000 or even less – and have since had to change their tune as gold has been on the way up virtually ever since the markets opened after this year’s New Year holiday on January 4th. Bank analysts are nothing but reactive to the latest trends in their ongoing assessments!

Following the investment progress of the main ETFs could be important.  The current consolidation, or perhaps stutter, in the gold price (and its knock-on effect in the other precious metals) has coincided with a small downturn in gold holdings in the world’s largest ETF – SPDR Gold Shares (GLD).  We suspect there has been a bit of profit taking already which may have led to this, but we see the latest price move as consolidation rather than the start of a downturn.  It may take a significant piece of adverse news – a major bank collapse maybe, or a sharp downturn in the major global stock markets – to set the price back on an upwards trend, but in the current shaky financial climate it may not be too long before such an event occurs.  On the other hand should the U.S. Fed again start talking about raising interest rates sooner rather than later, as some are beginning to suggest again, then the gold price could take a knock.  One worries about the Fed talking heads agendas between FOMC meetings as those who talk the idea of interest rate rises up, or down, must be well aware of the likely impact on the markets and the potential for making substantial personal gains on the outcome of their prognostications.  We’re not suggesting that they are, indeed, playing the markets in this manner, but there is certainly the potential for so doing!  It may just be, however, that it is in the Fed’s interest to keep the markets in something of a mood of uncertainty while it deliberates on its next move.

But with Brexit mostly falling out of the equation as the UK and European economies start to stabilise, the next impact may be with the coronation of the UK’s next Prime Minister – either Teresa May (who was pro-remain, but perhaps only lukewarm in that opinion) or the far less well-known Angela Leadsom, who was pro-Brexit.  (Strong women seem to be taking over the world!).  The policies the winner follows may set the agenda for Europe as a whole and may prove to be the next big precious metals driver – for better or for worse.

Gold and silver consolidating – may then move higher

Gold TodayGold closed in London at $1,364.oo on Wednesday after Tuesday’s New York close at $1,355.60.  In Asia the gold price held at close to its previous close, as you can see below. We continue to see the Yuan trend lower..  

  • The $: € slipped to $1.1066 down from $1.1058.
  • The dollar index was almost unchanged at 96.17 from 96.19 yesterday.
  • The Yen was slightly weaker at 101.00 from at 100.41 against the dollar.
  • The Yuan was slightly stronger at 6.6820 from 6.6900 yesterday.
  • The Pound Sterling fell to $1.2968 down from $1.2987! It fell to $1.2798 at one point this morning.

Yuan Gold Fix

Trade Date Contract Benchmark Price AM Benchmark Price PM
2016  07  7

2016  07  6







Dollar equivalent @ $1: 6.6847

$1: 6.6900





Shanghai saw gold prices hold higher than both London and New York, but only slightly [$4]. We cannot read too much into this difference due to the current market volatility in both currency and gold prices.

LBMA price setting:  $1,367.10 down from Wednesday 6th July’s $1,370.00.

The gold price in the euro was set at €1,232.45 down €5.46 from Tuesday’s €1,237.91.

Ahead of the opening in New York the gold price stood at $1,362.35 and in the euro at €1,229.67.  

Silver Today –The silver price closed in London on Monday at $20.09 up from $19.95 the day before.  Ahead of New York’s opening the price was trading at $19.90.

Price Drivers

While global financial markets are slightly calmer today, we see them digesting the worrisome information coming out of the impending crises areas. None of the information has changed but global financial markets need to get a sense of proportion and measure each factor within this context. For instance the Italian Banking crisis can drag out through the summer and could gain the green light for the Italian government to inject funds into them. Then it appears that in the short to medium term, the crisis would evaporate.

To give background to the E.U. systemic problems, we note that France, Italy and Germany have elections coming up. The political problems of Europe could spill over into the financial worlds easily. On top of that, the structure of the E.U. will come under intolerable strain if just one country exits the E.U.

Gold ETFs – In New York yesterday there was a tiny sale of 0.277 of a tonne from the SPDR gold ETF leaving its holdings at 982.444 tonnes. But there was a purchase of 1.76 of a tonne into the Gold Trust taking its holdings up to 213.19 tonnes.

Since January 4th this year, the holdings of these two gold ETFs have risen by 398.848 tonnes.

Silver –Silver prices are pausing, but we expect for only a short while before moving higher, again.

Julian D.W. Phillips | | StockBridge Management Alliance [Gold Storage geared to avoid its confiscation]

ETFs main gold price drivers as GLD + IAU combined add close to 400 tonnes this year


Gold TodayGold closed in London at $1,355.60 on Tuesday after Monday’s New York close at $1,344.90.  In Asia the gold price jumped ahead of London’s opening and also adjusted for a decidedly weaker Yuan.  

  • The $: € rose to $1.1058 up from $1.1156.
  • The dollar index moved higher to 96.19 from 95.54 yesterday.
  • The Yen was stronger again at 100.41 up from 101.70 against the dollar. It appears that the Bank of Japan has lost its effectiveness.
  • The Yuan was almost weaker at 6.69 from 6.6661 yesterday.
  • The Pound Sterling fell to $1.2987! It was close to $1.48 before Brexit.

Yuan Gold Fix

Trade Date Contract Benchmark Price AM Benchmark Price PM
2016  07  6

2016  07  5







Dollar equivalent @ $1: 6.6900

$1: 6.6673





With HSBC knowing it had to buy over 30 tonnes of gold in London after New York’s purchases of SPDR and Gold Trust shares, to supply the U.S. gold ETFs, it would be expected that the bank would take short-term positions in Shanghai to that extent.

Once London opened they would then find the gold and take it off London’s market, then sell its Shanghai position after the price rise, taking a  turn in Shanghai.

Would this be a conflict of interest? Their role as a Custodian for ETF in the U.S. gives them an advantage over others as they have insider knowledge of the deals, but this is an arbitrage deal of sorts.  Other banks such as Goldman Sachs also had distribution  rights over commodity markets and took advantage of their positions, but worries over the regulatory aspect has obliged them to exit such markets. The arbitrage aspect of HSBC’s position may not make that necessary?

The effect of such demand and how it is handled, as above, puts the pricing power in Shanghai because of this structural aspect. China is the first market to be able to respond to ETF demand.

LBMA price setting:  $1,370.00 up from Tuesday 5th July’s $1,344.75.

The gold price in the euro was set at €1,237.91 up €31.42 from Monday’s €1,206.49.

With New York returning for business today, the gold price ahead of its opening stood at $1,370.00 and in the euro at €1,236.46.  

Silver Today –The silver price closed in London on Monday at $19.95.  Ahead of New York’s opening the price was trading at $20.12.

Price Drivers

There is a new air of crisis in global financial markets this morning as:

  • The pound sterling drops to a new low to $1.2933 this morning in London. This is a victory for Britain’s entrance into the ‘currency war’. Exchange Controls could have protected the pound’s exchange rates, but the advantage of a lower pound and retention of an open economy appears to be better for the U.K. than protection for the pound.
  • The Italian government stands on the brink of bailing out Bank Monti Paschi signaling the start of an Italian banking crisis. Will this spread across the E.U. banking system in a systemic crisis, as many banks look decidedly weak? Bond and shareholders will be asked to carry some of the load should the bank fail.
  • Protectionism is rearing its head again between the U.S. and China on the intellectual property front.
  • German factory orders dropped surprisingly last month [ahead of Brexit] indicating further global growth sagging.
  • U.S., German & Japanese bonds yields hit new lows.

This confirms the fears that Brexit has been the trigger for several crises that were building up before it. Please note this appears to be the start, not the finish of these problems.

Gold ETFs – New York’s demand for gold was seen in the gold ETFs very clearly yesterday as a record amount of gold was bought into the SPDR gold ETF of 28.807 tonnes yesterday. In the Gold Trust 3.26 tonnes of gold was added making its holdings 211.43 tonnes.

These purchases feed through into the London market, where the physical gold is bought for the funds. This caused the price to leap this morning.

Since January 4th this year, the holdings of these two gold ETFs have risen 397.365 tonnes. Until the ‘gold season’ starts in September, Repeat: ETF demand is the main driver of the gold price.

Silver –Silver prices are bounding higher as U.S. investors pile into this small and volatile market.

Julian D.W. Phillips | | StockBridge Management Alliance [Gold Storage geared to avoid its confiscation]

Gold rising; silver too even more so but may see a temporary pause

Silver bounding higher, gold still rising as structural damage begins to be realized!

Gold TodayGold closed in New York at $1,323.70 after yesterday’s $1,317.60.  In Asia the gold price jumped higher and London was trying to take the gold price higher just after its opening.  

  • The $: € slipped to $1.1152 down from $1.1067.
  • The dollar index moved higher to 95.89 from 95.51 yesterday.
  • The Yen strengthened slightly [102.65 down from 102.88].
  • The Yuan was strengthening up to 6.6572 from 6.6441 yesterday.

Yuan Gold Fix

Trade Date Contract Benchmark Price AM Benchmark Price PM
2016  07  1

2016  06  30







Dollar equivalent @ $1: 6.6572

$1: 6.6441





Once again Shanghai took the lead in taking gold prices higher in their today, as the perspective on the global economy continued to point to more deflation and national monetary policies targeted more easing. The Bank of England of the United Kingdom [How long will it be called that if Scotland has a referendum to remain in the E.U. – will we have Border Controls in Berwick?] indicated lower interest rates, likely in August. The pound continues to slip.

LBMA price setting:  $1,331.75 up from Thursday 30th June’s $1,317.00.

The gold price in the euro was set at €1,199.02 up €18.07 from Thursday’s €1,180.95.

Ahead of New York’s opening, the gold price was trading at $1,334.30 and in the euro at €1,199.42.  

Silver Today –The silver price closed in New York on Thursday at $18.78 up from Wednesday’s $18.26 a rise of 52 cents. Ahead of New York’s opening the silver price stood at $19.20. We expect it to continue to outpace gold, particularly when gold rises itself.

Price Drivers

The preoccupation in the U.S. with when the next rate hike will be, is giving way to the possibility of rates easing. Perhaps additional Q.E. will come onto market screens as global deflation continues its firm grip on the developed world economies.  We do not believe the U.S. dollar can carry the burden of a strong Dollar.

Japan has announced a further fall in prices, which to us is confirmation that the Bank of Japan’s stimuli is failing badly.

In the United Kingdom we are likely to see a recession. The Governor of the Bank of England, Mark Carney, stated today, “It now seems plausible that uncertainty could remain elevated for some time. The economic outlook has deteriorated and some monetary policy easing will likely be needed over the summer.”

Any loosening by the BoE would be its first since 2012, when it last expanded its asset purchase program. Its key interest rate has been at a record-low 0.5% since March 2009. The BOE has signaled it can go closer to zero. Sterling has fallen about 11% since the EU vote.

Asked about the initial drop after the referendum result, Carney said big moves were to be expected and there had been a need for the pound to “find a new level.” It is doing so and will likely fall further.

Gold is moving higher and will likely continue to do so in the face of monetary easing engulfing the global economy at the same time as deflation grows.

Gold ETFs – On Wednesday the holdings of the SPDR gold ETF remained the same leaving their holdings at 950.054 tonnes and the holdings of the Gold Trust rose a relatively massive 4.46 tonnes to take the holdings to 208.17 tonnes.   Since January 4th this year, the holdings of these two gold ETFs have risen 361.438 tonnes.

Silver –Silver prices need to pause before tackling overhead resistance.

Julian D.W. Phillips | | StockBridge Management Alliance

Gold ETFs still increasing holdings. Greenspan, Faber tell investors go for gold.

Markets calmer, but more money printing across the world lies ahead, cheapening currencies against gold and silver!   

Gold TodayGold closed in New York at $1,317.60 after yesterday’s $1,312.40 down from $1,326.50 on Tuesday.  In Asia and London the gold price held at the same levels.  

  • The $: € slipped to $1.1152 down from $1.1067.
  • The dollar index moved higher to 95.51 from 96.01.
  • The Yen weakened slightly [102.88 down from 102.50].
  • The Yuan was strengthening up to 6.6441 from 6.6482 yesterday.

Yuan Gold Fix

Trade Date Contract Benchmark Price AM Benchmark Price PM
2016  06  30

2016  06  29







Dollar equivalent @ $1: 6.6441

$1: 6.6482





Shanghai, New York and London were in sync in the last day with gold pausing at lower levels. The day before, Shanghai led the way, taking the gold price up to $1,323.4 at the afternoon ‘Fix’ there.  There were a few days when Shanghai was playing ‘catch-up’ with London and New York. We see this as reflecting a broader global view on the reactions to Brexit.

The Yuan was relatively stable today after depreciating steadily in the last few days. We do expect an ongoing gentle decline of the Yuan over the weeks ahead as most ‘hard’ currencies join in the ‘currency war’.

While Brexit has caused the U.K. to join the ‘currency war’, with more monetary easing, we do expect to see the U.S. react strongly to a stronger dollar if we see it on the index. The prospect of a Fed interest rate hike was being pushed out to 2018 by the markets today. But more will be needed to make the dollar fall with other ‘hard’ currencies. We would not be surprised to see Q.E. return in the U.S. or other similar moves, in time.

The conclusion of the ‘currency war’ has to be protectionism expressed through tariff or various forms of Capital Controls.

LBMA price setting:  $1,317.00 down from Wednesday 29th June’s $1,321.50.

The gold price in the euro was set at €1,180.95 down €13.14 from Tuesday’s €1,194.09.

Ahead of New York’s opening, the gold price was trading at $1,317.40 and in the euro at €1,181.84.  

Silver Today –The silver price closed in New York on Wednesday at $18.26 up from Tuesday’s $17.78 a rise of 38 cents. Ahead of New York’s opening the silver price stood at $18.40. We expect it to continue to outpace gold, particularly when gold rises itself.

Price Drivers

The amazement that Britain voted for the exit from the E.U. continues with anger showing itself in Europe. It is clear that a recession is looming in the U.K. and may well do so in the E.U., while low growth in the U.S. may start to weaken further. All were so convinced that Britain would vote to remain in the E.U. that it seems no plans were made for the exit. Politicians now realize they completely misread the voters [who like politicians, were voting for their own interests – halting immigration seems to have been the main concern]. Much as politicians want to turn back, that’s not on the agenda.  

The scene of the world is changing and becoming more violent, poorer [at consumer level] while globally diasporas are growing and increasing in intensity. Politicians from the U.S. to the U.K. and Europe don’t seem to have understood the implications, so creating uncertainty. This leaves the establishment trying to protect their economies at the expense of their currencies. It is this that will continue to their losing value against gold and silver.

In such times gold and silver represent stores of value. Not only is Alan Greenspan expressing himself as a ‘gold bug’ but Marc Faber is telling investors to go for gold.

While this is right, it does not describe government’s changing views on gold and the future actions they are likely to take to shore up confidence in their currencies with gold.

Gold ETFs – On Wednesday the holdings of the SPDR & gold Trust rose 2.673 tonnes with their holding growing to 950.054 tonnes and the holdings of the Gold Trust rose 0.3 of a tonne to take the holdings to 203.71 tonnes.

Since January 4th this year, the holdings of these two gold ETFs have risen 356.978 tonnes.

Silver –Silver prices are now going full pelt higher!

Julian D.W. Phillips | | StockBridge Management Alliance

Thoughts on Brexit likelihood and big decline in Central Bank buying

Two articles published by me on, the first of which looks at the possibility of Brexit and although polls look to be showing a swing to the ‘Remain’ option they are still too close to call and the result may come down to whichever side is most successful in getting their voters out.  See:

Brexit loses momentum. Gold drops. But it ain’t over yet!

The second article examines latest Central Bank statistics which have seen a huge slowdown in May with the Chinese Central Bank apparently buying no gold at all, and Russia buying only 3.1 tonnes.  Given that China and Russia were, by a huge amount, the principal buyers of gold over the past year for their respective central banks a continuation of such a slowdown means the the specialist precious metals consultants’ estimates for Central Bank gold buying this year, a significant part of prospective gold demand, may prove to have been hugely over-estimated.  However to counter this purchases into the gold ETFs have been far higher than estimated.  Swings and roundabouts!  See:

 Central Bank gold buying slipping back, but ETF demand compensating

Gold price slips in NA trading – but gold ETF holdings increasing

Gold TodayGold closed in New York Friday at $1,288.20 up from Thursday’s $1,277.30. On Monday morning in Asia it fell to $1,280.00, as the Yuan continued to weaken against a stronger dollar, before the LBMA price setting in London.

LBMA price setting:  $1,277.75 up from Friday’s $1,2805.25.

Yuan Gold Fix

Trade Date Contract Benchmark Price AM Benchmark Price PM
2016  05  9

2016  04  6







Dollar equivalent @ $1: 6.5290

$1: 6.5177





The Shanghai Gold Fixings today were higher than New York’s close in the morning, but slipped in their afternoon back to around the close in New York, with London around the same level [allowing for the morning’s moves in exchange rates].  

Gold prices have moved only by a little amount, through the three centers, in the tight range of $1,277- $1,280. We continue to expect a strong move, once the gold price moves outside this range. We continue to expect the driving forces behind the gold prices to be exchange rates.

The dollar index is at 94.02 up from Friday’s, at 93.60. The dollar is stronger against the euro at $1.1387 up from $1.1426 on Friday.

The gold price in the euro was set at €1,120.47 up from Thursday’s €1,116.04.

Ahead of New York’s opening, the gold price was trading at $1,274.60 and in the euro at €1,119.34, but slipped further as U.S. trading got under way.  

Silver Today –The silver price closed in New York on Friday at $17.45 higher than Friday’s $17.34. Ahead of New York’s opening the silver price stood at $17.24.

Price Drivers

The jobs numbers from the U.S. last Friday were disappointing. In this environment it is most unlikely that we will see rate hikes anytime soon. Our view was that a maximum of two rate hikes would be seen in 2016. We continue to hold that view but if we are wrong it is more likely that there will be only one, or none. The ‘data’ will dictate how many! What is for sure is that if there is no rate hike in June, U.S. demand for gold will rise again.

China’s reserves of gold rise – China increased its gold reserves by 10.89 tonnes last month. We have come to expect around 21 tonnes a month increases over the last few months. We don’t think there has been a change in policy. As these reserves come mainly in the form of 400 oz bars, they would have to have been bought on the London market. We see China’s policy as taking what’s offered to them by dealers, so as to not chase prices. With the heavy U.S. demand ongoing, it may be that there was little on offer.

On top of that it is becoming clearer that not only is New York very low on physical gold, but London is moving that way. It appears that London is becoming more like COMEX every day, dealing in ‘paper gold’ on contracts that are closed out before they mature. That negates the need for physical gold.  

With Shanghai being a physical gold market, the osmotic pressure from China is on London and is slowly draining gold liquidity there. If this continues, there will come a time when London loses its pricing power and passes it to China. And that may be sooner than we think!

Gold ETFs – Friday saw purchases of 4.754 tonnes of gold bought into the SPDR gold ETF and another 1.05 of a tonne bought into the Gold Trust. This leaves their holdings at 834.194 and 196.43 tonnes in the SPDR & Gold Trust, respectively.  

The purchases of the last three business days totaled over 15 tonnes into these two gold ETFs and should continue to have a positive impact on the gold price.  HSBC, the custodian of the SPDR gold ETF has to buy physical gold in London when SPDR shares are bought, but when selling happens, they have a choice of where to sell, London of Shanghai. They cannot buy in Shanghai for U.S. delivery.

Silver – The Silver price continues stable and ready to move. It continues to mark time, waiting for gold to lead the way.

Julian D.W. Phillips | | StockBridge Management Alliance

Q1 gold and silver rally different this time around

A Paper Gold Rally – Physical Yet To Engage

by Ross Norman – CEO Sharps Pixley Ltd.

The key question in our mind is whether a paper rally in gold can be sustained without the significant engagement of the physical community…

During 1Q16, physical demand for gold declined 23.8% compared to 1Q15 according to GFMS (1025 tonnes Vs 781 tonnes) yet gold prices rallied 22% – res ipsa loquitur.

Gold’s gain year-to-date is impressive – not to say exceptional – and gold bugs will heave a sigh of relief that it has behaved as it should in the face of what is clearly a vulnerable, even fragile macroeconomic outlook. However 2014 and 2015 saw similar rallies before momentum fade set in after Q1 in both years and hence not surprisingly confidence remains light, particularly in view of the size able 45% correction since 2011.

2016 is different.

Yes, gold has seen a similar price action, but the drivers are not the same. The key physical gold markets in China and India are comparatively speaking absent and the erstwhile seller – the West – has turned buyer.  This is not a question of geography, but of motivation, form and tenure.

The correction lower from all time highs at $1922 in 2011 were driven by selling across the spectrum of the gold community in the West. European Central banks had already disgorged sizeable chunks of metal under the Washington Accord and then it was instititutional investors selling of ETFs (roughly 1000 tonnes), coupled by speculators on COMEX who sold their long futures positions and the market went into a rare net short position – and then there was cash-for-gold at the retail end – not in itself significant in size, but it underscored the West falling out of love with gold and cashing it in to sustain the consumption binge of the early 2000’s.

Never before was there such an epic movement of bullion from West to East in exchange for fripperies since the days of Marco Polo and the silk road.

This year on COMEX we have seen a battle royal between the longs and the shorts with the former winning out. The short covering has played a key role in taking the market through key technical levels and net longs stand at close to record highs. This should leave gold bulls – especially contrarians like myself – feeling distinctly uncomfortable. Meanwhile ETF flows have risen at record pace adding 330 tonnes in Q1 (compared to just 36 tonnes in Q1 2015). Now it could be argued that ETFs are paper or physical – this is irrelevant – what matters is how they behave and as we saw since 2011 these players can operate with the same short termism as speculators and rapidly reverse their positions. In short neither can be entirely trusted.

Meanwhile Indian buyers are absent as its government behaves as if it was at war with its gold community (and 3,000 years of history) through punitive taxes ; the market remains lacklustre with prices at a 2 1/2 year high in local terms and is not much helped by a poor monsoon and therefore harvest. The Chinese and indeed Russians meanwhile seem content to pick metal up on any price correction (more traditionally the Indian style) and not chasing the market higher – price supportive, but not a driver. GFMS reports that physical purchases for 1Q16 declined in India by nearly 65% compared to 1Q15.

So what has changed. There is growing perception in the West that Cental Banks may indeed be fallible and that the Keynesian experiment may have run its course – in short, the desire for sound money and by extension a growing concern about the increase in debt to resolve financial crisis is gaining currency. If fear is back in vogue then arguably it may less of a sustainable position then the motivation of many Eastern buyers which is simply as long term store of value.

For gold to see a sustained rally it needs to fire on more than one cylinder and physical players need to join the party. This in turn would put bullion onto the radar of institutional investors who are yet to be convinced that it really is an alternative to more traditional asset classes. This could then bring about the price elasticity – or buying on higher prices – that typified the last bull run. Or equally perhaps physical buyers do not turn up to the party in which case the speculators – sometimes described as behaving like 11 year olds high on e-numbers – could get bored and as easily reverse their positions.


Time will tell.

Gold breaks through overhead resistance.  Dollar still weakening

Gold TodayGold closed in New York at $1,256.10 up from $1,247.25 on Monday. On Tuesday morning in Asia, it jumped to $1,259. London took it up to $1,260 to see the LBMA price setting at $1,259.20 up from $1,247.25 on Monday.

The dollar index is lower at 93.85 down from 94.22 Monday. The dollar is weaker against the euro at $1.1419 up from $1.1391 on yesterday.

The gold price in the euro was set at €1,102.72 up from €1,095.23 Monday.

Ahead of New York’s opening, the gold price was trading at $1,261.65 and in the euro at €1,106.90.  

Silver Today –The silver price closed in New York at $15.90 up from $15.34 on Monday. Ahead of New York’s opening the silver price stood at $16.12.

Price Drivers

And so we have broken through overhead resistance, so where next?

Surprisingly, the rise was not driven by U.S. ETF shares buying, but prompted by dollar weakness which now continues across the currency board. Against the euro $1.15 appears to be an initial target.

Once again most investors appear to be surprised and expect a rally in the dollar. Many rely on the potential two interest rate hikes expected this year [despite the possibility of no interest rate hikes at all] to take the dollar higher in the belief this will give value to the dollar. Those in the ‘carry’ trade may well disagree strongly with this. After all when you look at the peak in the dollar of 100 and at current levels, what benefit in getting an annual extra half a percent if you lose 8% of your capital at least?

Exchange rates are key to the financial world this year, as the dollar retreats from hegemony into one of five key global currencies in a multi currency system. Of these the Yuan has the advantage, as it is starting off with only a small presence but one that is set to rise to profound significance in the year and years to come. This rise will be at the expense of the dollar and the euro primarily. The Fed fully understands this.

It is the change in the composition of central bank currency reserves that will ruffle the feathers of global financial markets in the future. This has not been factored into these markets even now.

Gold and silver will surprise everyone this year!

Gold ETFs – We saw no sales or purchases into or from the SPDR gold ETF but a purchase of 0.48 of a tonne into the Gold Trust on Monday. This leaves their holdings at 817.813 and 187.74 tonnes in the SPDR & Gold Trust respectively.  

Silver – The silver price is running full pelt ahead of gold and should continue to do so as gold rises.

Julian D.W. Phillips | | StockBridge Management Alliance

Gold testing overhead resistance, silver running ahead of gold

Gold TodayGold closed in New York at $1,240.30 up from $1,240.30 on Friday. On Monday morning in Asia, it jumped to $1,253. London pulled it back to $1,247.35 to see the LBMA price setting at $1,247.25 up from $1,235.00 on Friday.

The dollar index is slightly lower at 94.22 down from 94.36 Friday. The dollar is almost the same against the euro at $1.1391 up from $1.1390 on Friday.

The gold price in the euro was set at €1,095.23 up from €1,084.28 Friday.

Ahead of New York’s opening, the gold price moved back up to over $1,250 again and in the euro at around €1,097  

Silver Today –The silver price closed in New York at $15.34 up from $15.21 up from on Friday. Ahead of New York’s opening the silver price stood at $15.77.

Price Drivers

The undertone in the gold market is strong and pushing higher. Asian prices saw a jump this morning of over $10 and the jump mostly held in London as the dollar continued to slowly but surely weaken.  Janet Yellen’s comments continue to be digested as many institutions and commentators are having difficulty in accepting that the dollar will not strengthen and that two or less interest rate hikes are coming out of the U.S. What Mrs Yellen and the Fed have done which is also finding difficulty in being absorbed is the recognition that the U.S. economic recovery is vulnerable to outside influences including a strong dollar. It’s a culture shock to dollar hegemony and the U.S. leading the way economically around the globe.

The trading range of both gold and silver tells us a strong move is imminent as it breaks up out of the pennant it has been in for some time. Now overhead resistance will be tested still further in the days to come.

India – The government of India has formed a sub-committee under former Chief Economic Advisor Ashok Lahiri to study the imposition of the 1% sales tax on gold and silver in addition to the existing 10% already imposed and come up with suggestions. The jeweler’s strike is now completing its first month with no sign of respite.  We don’t think anything will change because now, the Central Board of Excise and Customs (CBEC), has imposed 15% ad valorem duty on several items including gold and silver that are brought into the country by travellers.

Consequently, both demand and the price of jewelry are soaring as the wedding season approaches. In the unique Indian way the business will go on, government or no government. Work has gone underground to meet the lucrative wedding season demand, with the wedding season ‘mahurat Sawas’ arriving at the end of this month. Officially, the strike continues. Gold is being sold in the market without the customs duty. Traders added are making jewellery at Rs 28,500 per 10 grams [which equates to $1,380].  No doubt supplies are actually freely available from smugglers, who supply a significant proportion of gold imported into India.

Repeat: As we said yesterday, in our opinion the markets in gold and silver are rather like a cat getting ready to pounce. We expect the moves to be higher, but it could need more days of consolidation such as we have seen in the last week.

Gold ETFs – We saw sales of 1.783 tonnes from the SPDR gold ETF but no change in the Gold Trust on Friday. This leaves their holdings at 817.813 and 187.26 tonnes in the SPDR & Gold Trust respectively.  

Silver – The silver price is now beginning to run ahead of gold and should do so as gold rises.

Julian D.W. Phillips | | StockBridge Management Alliance