More gold going into GLD. Druckenmiller back as gold buyer.

Gold Today –New York closed at $1,233.00 on the 7th February after closing at $1,234.70 on the 6th February. London opened at $1,232.00 today.

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

         The $: € was weaker at $1.0672: €1 from $1.0666: €1 on yesterday.

         The Dollar index was weaker at 100.45 from 100.62 on yesterday. 

         The Yen was weaker at 112.38:$1 from yesterday’s 112.19 against the dollar. 

         The Yuan was weaker at 6.8860: $1, from 6.8790: $1, yesterday. 

         The Pound Sterling was stronger at $1.2514: £1 from yesterday’s $1.2363: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    2    08

     2017    2    07

      2017    2    06

SHAU

SHAU

SHAU

/

273.34

269.93

/

274.38

271.92

$ equivalent 1oz @  $1: 6.8790

      $1: 6.8790

$1: 6.8625

  /

$1,235.91

$1,232.81

/

$1,240.61

$1,232.45

 Shanghai was trading in gold at 275.00 Yuan during today’s session before London opened. This equates to $1,242.15. Shanghai is $4 higher than New York and more than $5 higher than Lomdon, but prices today have been heading in that direction.

LBMA price setting:  The LBMA gold price was set today at $1,235.60 up from yesterday’s $1,231.00.  

The gold price in the euro was set higher at €1,160.51 after yesterday’s €1,152.89.

Ahead of the opening of New York the gold price was trading at $1,237.00 and in the euro at €1,161.78.  At the same time, the silver price was trading at $17.74. 

Silver Today –Silver closed at $17.71 at New York’s close Friday against $17.73 on the 6th February. 

 Price Drivers

While U.S. based gold investors have returned to the gold market via the SPDR [GLD] gold ETF, we had not heard of any large gold investors returning until now. Today we have received reports that Stan Drukenmiller, having exited the gold market in December, has returned to it.

He is a short to medium trader but a very large one, with his fund. So he can exit just as fast. But he is the type of gold investor that leads the way for others.

We had almost forgotten Greece’s debt problems and then suddenly it’s back. The expected economic recovery is just not producing the results creditors wanted. It will not be able to meet its obligations shortly, so Germany wants more austerity and less pensions.

This may be the straw that breaks the camel’s back. Will Greece leave the euro and E.U.? At this stage, bearing in mind Prime Minister Tsiprias’ actions last time, we think not, but certainly it adds to the negative situation in the E.U. Add to that France’s elections and Italy’s woes and we see a Europe on the brink and unlikely to survive in its present form. This is gold positive.

With Japan now dumping U.S. Treasuries as yields rise, causing capital losses the U.S. bond market is falling and very vulnerable to more large falls as yields continue to rise. It was inevitable. With so many simmering sources of trouble the natural inclination to see only the best may not serve us well.

Gold ETFs – Yesterday we saw 8.295 tonnes of gold bought into the SPDR gold ETF (GLD) and 0.39 of a tonne into the Gold Trust (IAU).  Their respective holdings are now at 826.948 tonnes and 200.30 tonnes. 

This large purchase yesterday into the SPDR gold ETF doubled the amount bought by U.S. investors into U.S. gold ETFs since the beginning of this year.  

We expect U.S. Investors to follow the lead of these hedge funds.

Since January 4th 2016, 226.638 tonnes of gold have been added to the SPDR gold ETF and to the Gold Trust.  Since January 6th 2017 16.557 tonnes have been added to the SPDR gold ETF and the Gold Trust.
 Julian D.W. Phillips: GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance 

Shanghai’s gold pricing power ever-growing

On Friday New York closed at $1,092.10 up $2.80. The dollar is down more than half a cent at €1.0976, with the dollar Index weaker initially before rising to 97.85 down from 97.90. This morning the LBMA gold price was set at $1,094.80 up $3.45. The euro equivalent was €1,001.01 up €3.25. Ahead of New York’s opening, gold was trading in London above $1,094.30 and in the euro at €1,000.50.

The silver price closed at $14.77 up 12 cents in New York. Ahead of New York’s opening it was trading at $14.94.

There were sales from the SPDR gold ETF of 0.24 of a tonne but none from the Gold Trust on Friday. The holdings of the SPDR gold ETF are at 667.694 tonnes and 161.83 tonnes in the Gold Trust. With so little sold from these gold ETFs the gold price floated higher and in Asia it started to accelerate higher to $1,098 before pulling back in London’s morning.

As you can see from New York’s close the ‘bear raid has stopped, it seems, with less than quarter of a tonne sold from the SPDR gold ETF. If the market believes the selling has stopped there is only one way the market can go apart from sideways. It would take a headstrong seller to enter the market now unless he had a hefty amount of physical gold to sell. Meanwhile, the first buyer to break cover may find himself leading a herd?

Chinese demand is there solidly, as this morning’s price testifies and we are three weeks from the beginning of the gold season. Europe is on holiday until then, thereafter entering the busiest time in the developed world’s gold season too. We watch to see if instead of seeing the developed world unloading gold into Asia Shanghai comes to the developed world to take more gold from there to eliminate the premium? This would tell us just how far the evolution of the gold market has come this year and just how far Shanghai’s pricing power has grown.

The news out of the U.S. on Friday was good for the economy and the prospect of a rate hike either in September or December seems certain. But this did not prompt gold sales in the U.S. or London. Has the rate hike been discounted in the gold price? Friday’s behavior tells us, yes it has.

Oh, just in case you had forgotten Greece, it must have a bailout solution before August 20 or it will miss a payout to the ECB. The fact that a nation must borrow to service debt could not be a louder signal of its bankruptcy.

Julian D.W. Phillips for the Gold & Silver Forecasters – www.goldforecaster.com and www.silverforecaster.com

Greek deal seen as negative for gold and Euro

Julian Phillips’ take on the apparent Greek-EU deal and its likely effects on the market.

New York closed Friday at $1,163.00 up $0.60 with Asia and London taking it down this morning to $1,160. The dollar was weaker at $1,1147 down from $1.1140 against the euro with the dollar Index at 9587 down from 96.11.  The LBMA gold price was set this morning at $1,154.95 down $7.45. The euro equivalent was €1,043 13 down €4.86. Ahead of New York’s opening, gold was trading in London at $1,156.80 and in the euro at €1,044.66.

The silver price rose to $15.58 up 12 cents in New York. Ahead of New York’s opening it was trading at $15.48.

The week has started with a deal between Greece and the E.U. after a frantic weekend. For gold and silver investors the details of the deal are irrelevant. It means that Greece will not exit the euro or Eurozone and so there is no threat to either, anymore. The market is reading this as a negative for the gold and the euro. But this was the initial reaction in London. The market may be in turmoil as they settle down now. Is this the end of the threat to the euro and E.U. of Greece’s departure? We think so. But it certainly isn’t the end of the Greek drama/tragedy.

The agreement means that the attention of the monetary world will revert to the E.C.B.’s quantitative easing and the desire of the E.C.B. to see a lower euro exchange rate with the dollar. We expect that if the euro does not weaken it will be because the U.S. Treasury does not want to see a stronger dollar than it is already, but may have to, as a rate hike may now be closer, after Greece.

There appears to be an imminent deal between Iran and the U.S. so the media has led us to believe. If this does happen, then the markets should pull down the oil price strongly and keep it there for a long time and will be very bad news for “Fracking” oil production. This will be a positive for the global economy having a similar impact to a tax break. But will this feed down into the economy of the world? Overall it should.

To get a balanced perspective on all of the above for gold and silver, we remind readers that these issues have an influence on speculative activity not on gold and silver’s fundamentals. However, with speculative activity having a major impact on prices until the entry of Chinese banks and an arrival of a Yuan “Fix”, when gold and silver prices are headed towards a major shift from speculative dominance, to an Asian, more fundamentally oriented pricing than we have seen for several years.        Julian D.W. Phillips for the Gold & Silver Forecasters – www.goldforecaster.com and www.silverforecaster.com

 

Gold in limbo as Greece and E.U. hit impasse

Julian Phillips’ latest assessment of the short term market for gold and silver.

The movement in the gold and silver market has been so small it would be foolish to read too much into the moves we see. Essentially the gold and silver prices continue to move sideways. Yes, dealers and speculators will try to squeeze some movement out of these prices but the lack of physical speculation and investment sees prices continuing to move sideways. We expect this will describe the week well, unless the market is caught off guard by some big news.

No matter how much we want different news, we continue to see Greece push its way to center stage. The weekend meetings continued to point to no agreement and there are 15 days to the end of the month when a far too large payment is due from Greece, which it can’t pay. The Finance Minister tells all that without a reduction in the debt, Greece can’t pay. So don’t expect any partial payments.

To understand where we go from here, we put ourselves in the shoes of each side of the issue: –

Greece won’t lower pensions because they don’t have the mandate to do so and so many unemployed voters are living off their parents. They are in the same boat as they were before they joined the E.U. so there is nothing to lose by leaving and at least a generation of poverty ahead of them if they stay.

The E.U. can’t compromise or they will have to do the same for Portugal, Spain possibly France and Italy thereafter?

The issue is therefore not Greece exiting, but political face saving. This bodes ill for the end of the next fortnight. How is this relevant for precious metals? At the moment last week’s expectation of a weaker euro if no settlement is reached and a stronger euro if a settlement is achieved appears to be changing to; let’s do nothing until the end of the next fortnight. We then expect to see a stronger euro if Greece exits the E.U. and the euro.

There were sales of gold from the SPDR gold ETF of 0.241 of a tonne of gold on Friday. The holdings of the SPDR gold ETF are at 703.984 tonnes and at 167.01 tonnes in the Gold Trust.

Julian D.W. Phillips for the Gold & Silver Forecasters – www.goldforecaster.com and www.silverforecaster.com

 

Greece back into the gold equation

Julian Phillips’ latest insights into what’s driving the gold and silver markets

New York closed Thursday at $1,181.50 down $4.70.  Today sees the dollar stronger at $1.1189 up from $1.1271 nearly a cent stronger against the euro with the dollar index stronger at 95.40 up from 95.03. The LBMA Gold Price was set at $1,179.25 down $1.25 with the equivalent euro price at €1,053.98 up €6.18. Ahead of New York’s opening, gold was trading in London at $1,181.10 and in the euro at €1,055.26.

The silver price rose slightly to $16.04 up 1 cent in New York. Ahead of New York’s opening it was trading at $15.95.

With the currencies continuing to react to the political situation in the E.U. gold is very steady as these currencies react to gold. In other words, currencies are moving against gold while gold continues to move sideways in London and New York. To make a move either way in significant terms will take an event, such as the departure of Greece from the Eurozone.

And today’s news of the day is, once again, Greece, as the IMF walks out of a meeting with Greece stating ‘serious differences’ with the Greek government. Statements that a ‘deal’ was imminent should be ignored from now on. The impression given by the actions of the IMF is that there will be no agreement before a default then Greece will have to settle its much reduced debt via classic Exchange Control regulations on a take it or leave it basis.

Essentially Greece is trying to gain an agreement with creditors on the basis that it is outside the E.U. already. A bankrupt Greece [there are no insolvency courts for nations] has a stronger hand than one begging for relief. As we have said many times before, Greece is already ruined as a debtor no matter what happens. It has nothing to lose by reneging on the debt. Remove that debt and Greece has a surplus. With a Drachma, it may be able to repeat what Iceland has done over the last few years [Iceland is now healthy financially]. History shows that a financially ostracized nation can recover.

On the other hand, the E.U. cannot accede to Greece’s demand or they will have to offer the same to other E.U. weaklings. So a ‘Grexit’ appears, right now, inevitable!

What we find surprising is that the euro appears to be rising on the expectation of a settlement and falling on expectations of a default. The loss of Greece‘s debt is a tiny matter for the overall E.U. so will not damage its financial standing. But the loss of such a weak nation from the E.U. will lead to a stronger euro, so the reverse should be happening.

There were no sales or purchases of gold from the SPDR gold ETF. The holdings of the SPDR gold ETF are at 704.225 tonnes and at 167.01 tonnes in the Gold Trust.

Silver is ready to be more volatile once gold starts moving. Regards,

Julian D.W. Phillips for the Gold & Silver Forecasters – www.goldforecaster.com and www.silverforecaster.com

Greece defers IMF payments while gold suffers

By Julian Phillips

New York closed at $1,177.00 down $16.40 against Wednesday’s close as there were very thin volumes being traded. Today sees the dollar slightly firmer at $1.1226 down from $1.1126 against the euro with the dollar index weaker at 95.67. The LBMA Gold Price was set at $1,175.90 down $11.10 and the equivalent euro price was €1,047.11 down €14.72. Ahead of New York’s opening, gold was trading in London at $1,173.20 and in the euro at €1,044.84.

The silver price rose slightly to $16.18 down 61 cents in New York. Ahead of New York’s opening it was trading at $16.16.

Thin trading was the main feature of the day in London and New York. In such an environment prices become extremely volatile and can move both ways quickly often reversing just as quickly. Volatility is paramount. The currency moves were sidelined as gold and silver fell in all currencies. The fall seems frightening as support at $1,180 has been breached. But readers should note that in such thin trading the Technical indicators may not be as reliable as they should be.  In such markets, one would be foolish to go firm on a future direction for silver and gold in the short term.

The main feature of the day for gold remains Greece as it postponed the repayment of €300 million until the end of June along with other payments due before then. This adds tremendous leverage to the ‘horse trading’ between the E.U. and Greece.  Despite reassurances that a deal was ‘close’ this move tells us that the situation is quite different. Now we wait still more, realizing that unless the E.U. agrees to the terms of Greece, they will hold a general election or referendum for permission to leave the E.U. and euro. Any funds they do have for repayment will not be repaid. With a default then a reality, we expect the Greek government to issue its own schedule of repayments.  We believe that unless the E.U. backs down there will be no agreement and the euro should go stronger as the main weak link in the E.U. is done away with. But then, expect great currency volatility across a group of currencies.

In the past two days we have not seen sales from either the SPDR Gold ETF or the Gold Trust. The holdings of the SPDR gold ETF are at 709.891 tonnes and at 166.71 tonnes in the Gold Trust.  We remain in ‘no widows or orphans’ territory. So, one may well ask what made prices fall so far? Dealers can and do protect themselves from sellers by marking prices down. The reverse is also true when dealers want to protect themselves from buyers by marking prices up too. This combined with small sales will trigger such behavior.

Silver remains riveted to gold in good times and bad and will continue to do so. We do, however expect the silver price to show even more volatility than the currently volatile gold price in thin markets.

Julian D.W. Phillips for the Gold & Silver Forecasters – www.goldforecaster.com and www.silverforecaster.com

Greece takes centre stage as potential gold price driver

Julian Phillips’ analysis of what’s going on in the gold and silver markets and key market drivers.

New York closed at $1,193.40 up $3.70 on Monday as the trading range remains tight but pushing up persistently. Today sees the dollar weaker at $1.1126 down from $1.0898 against the euro with the dollar index at 96.05. The LBMA Gold Price was set at $1,186.60 down $2.15 and the equivalent euro price was €1,061.83 down €20.92. Once again this was a currency play against a weaker dollar and stronger euro. Ahead of New York’s opening, gold was trading in London at $1,188.60 and in the euro at €1,068.93 with the euro recovering still further.

The silver price rose slightly to $16.80 up 7 cents in New York. Ahead of New York’s opening it was trading at $16.66.

With the dollar weakening traders and speculators need to decide is gold going up against a stronger euro or up with a stronger dollar. Any movements we see in the gold and silver prices are still being moved by currencies. The moves are so small now that we hesitate to attribute too much to them. The price of gold and silver remains in the tight trading range it has for the last couple of weeks and in the fairly narrow trading range it has been in for 18 months. We are close to several global events that will directly impact the gold price and by extension the silver price. After implying the dollar bull run could be over, we now see the dollar falling back quickly as visions of a strong recovery begin to fade after guiding investors for the last 7 years.

With the euro recovering [or is it the dollar weakening] the first of these is expected to be Greece, where a major meeting of the main E.U. leaders took place on Monday. The signs are that this was a conclusive meeting where Greece is going to be given a take it or leave it proposal. Greece in turn has formulated its own plan to give to these leaders.  While the Greeks say they can pay the first portion of the IMF debt this week, it is clear that this will drain remaining cash resources. With the Greek financial situation not only bankrupt, we are now at the point where they will have to leave the E.U. and euro if they fail to pay all due tranches of their debt.  As the euro will go much stronger if Greece leaves the E.U. it seems the market is discounting a ‘Grexit’. One could say they could have taken action to leave the E.U. and euro years ago and kept the funds in the country that have now gone. But politics has demanded the tragedy and the Drachma. The Drachma has now become palatable to the Greeks.

Yesterday saw sales from the SPDR Gold ETF of 4.176 tonnes and purchases into the Gold Trust of 0.11 of a tonne. The holdings of the SPDR gold ETF are at 709.891 tonnes and at 166.71 tonnes in the Gold Trust.  While these were large sales they had no impact on the gold price. As we move into ‘no widows and orphans’ territory we believe these sales were from an investor unhappy with the risks, despite the limited downside ones.

Silver still continues to mark time waiting for gold to lead the way.

Julian D.W. Phillips for the Gold & Silver Forecasters – www.goldforecaster.com and www.silverforecaster.com

 

Don’t short the Euro – Draghi. Contrarian indicator?

Julian Phillips’ comments on the gold and silver markets today and factors driving the prices.

New York closed at $1,204.50 up $5.50 on Friday in NY. Asia took it up to $1,208 with London holding it there ahead of the LBMA Gold Price. The LBMA Gold price was set at $1,203.25 down $1.30. The euro equivalent stood at €1,118.83 up €7.11 against a weaker $: € rate of $1.0753 against yesterday’s $1.08355. Ahead of New York’s opening, gold was trading lower in London at $1,198.30 and in the euro at €1,115.68.

The silver price closed at $16.26 down 3 cents on Friday. Ahead of New York’s opening it was trading at $16.05.

The dollar began the week at $1.0781 and the dollar index at 97.52 showing a consolidating dollar more than a rising euro. Gold moved through its trading range, ahead of New York’s opening. Once again the gold price was essentially moved sideways ahead of New York’s opening confirming the tightness of the trading range implying a strong move anytime.

The E.C.B.’ Draghi told the media on Friday that it was pointless to short the euro. History shows that when a central banker attempts to stall the movement of a market trend, it is taken as an incentive to do the opposite. We don’t see why this time an exception should be made. As we said last week, “The factors that drove the dollar higher remain in position and the trend remains for a stronger dollar.” After all, the E.U. is gaining competitiveness enormously by the fall in its exchange rate.

To us the Greek situation is becoming more transparent as Greece said it won’t renege on election pledges to end austerity measures. The Deputy Prime Minister said, “We don’t budge from our red lines.” Now look at the laid back attitude of the Prime and Finance Ministers of Greece and we see them waiting for the E.U. to give a solution as they are unlikely to do more. Unless the E.U. offers more money Greece will be ejected from the euro. The tragedy will therefore grind on until June with the euro tending to weaken until then [we remind readers that  the euro trend is down while E.U.Q.E. continues through to Sept 2016].

There were purchases of 2.988 tonnes into the SPDR gold E.T.F. but no change in the Gold Trust on Friday. The holdings of the SPDR gold ETF are at 739.069 tonnes and at 165.28 tonnes in the Gold Trust.

From today onwards we expect Indian demand to subside as the festival season comes to an end.

Julian D.W. Phillips for the Gold & Silver Forecasters- www.goldforecaster.com and www.silverforecaster.com

 

Weakening dollar sees strengthening gold price

AIIB implications and the latest Greek developments as it tries to avoid default are among the geopolitical factors discussed by Julian Phillips in his market comment on a day when the gold price may be consolidating above the $1190 level.

New York closed yesterday at $1,190.60 up $7.40. Asia held it $4 below that level before London opened, where it was lifted back up to $1,191.10 ahead of the “LBMA Gold price”. This morning the “LBMA gold price” was set at $1,193.25 up $11.85 and in the euro equivalent of €1,086.75 up €1. Ahead of New York’s opening, gold was trading in London at $1,193.60 and in the euro at €1,087.36.

The silver price closed at $17.06 up 33 cents. Ahead of New York’s opening it was trading at $17.02.  Silver is currently showing more strength than gold (which can be expected when the gold price is rising.)

There were no sales or purchases of gold from or to the SPDR gold ETF of or into or from the Gold Trust on Monday. The holdings of the SPDR gold ETF are at 744.401 tonnes and at 164.71 tonnes in the Gold Trust.

As gold approaches resistance at $1,200 we expect the price to consolidate and either build up strength for an assault on that price or turn down again. The $1,200 level is an important psychological level for gold now.

The dollar continues to retreat with the dollar index dropping to 96.74. The euro is currently standing at $1.0981 after reports that Germany is recovering well, taking the ‘average’ Eurozone growth higher to a recovery, moving forward. Nevertheless, such an average is not a fair reflection of what is going on in the E.U. as its separate member states are not faring well in the southern part of the E.U. The factors that are weakening the euro are still in place [EU QE] and intended to keep the euro weak going forward.

The U.S. meanwhile is starting to howl over a strong dollar. But the dollar appears to have peaked and has weakened by 4 points on the index in the last week, after rising the same amount the week before. Bearing in mind that the dollar remains very strong, up from a dollar index of 72 in the last year, it is hurting the U.S. economy. But a fall in the dollar is proving gold positive now (at least in dollar terms!)

The widening of support for the Asian Infrastructure Investment Bank is seeing Canada now join, leaving only the U.S. and Japan amongst the major nations not joining. This is interesting particularly as the IMF is reviewing the composition of its currency the Special Drawing Right later this year.  Any visible opposition by the U.S. to the AIIB could indicate opposition to the Yuan being included as one of the currencies against which it is measured. This would be gold positive!

In the ongoing Greek tragedy, Greece will list more specifically its intended reforms by the end of this week.  The question is, “Can they implement them effectively?” The ‘run’ on Greek banks continues while we wait.  Merkel is trying hard to slow the acrimony between the two nations, but it seems that this is not going away.

Julian D.W. Phillips for the Gold & Silver Forecasters – www.goldforecaster.com and www.silverforecaster.com

Big gold SPDR ETF sale has no impact on price confirming underlying strength

Julian Phillips’ take on the current gold and silver markets and geopolitical effects impacting on them

There was a large sale of gold from the SPDR gold ETF on Friday of 5.373 tonnes but there were no sales or purchases of gold into or from the Gold Trust on Friday. The holdings of the SPDR gold ETF are at 744.401 tonnes and at 164.71 tonnes in the Gold Trust.  This size sale would ordinarily have hurt the gold price in New York, but it didn’t, as you can see. This confirms underlying strength. The dollar weakened with the dollar index falling to 98.22 after its high of over 100. The euro recovered to $1.08 in Asia, slipped back to $1.0772 ahead of London’s opening then rose to $1.0887.

New York closed Friday at $1,183.20 up $12.90. Asia held it a dollar below that level before London opened. So far the new way of Fixing does not appear to have produced any dramas and the ‘runs’ have gone well. Of course true transparency would mean the participants disclosing details of their in-house deals which were ‘netted’ out before the participants did an overall ‘netting out’. This morning the “LBMA gold price” was set at $1,181.40 up $9.65 with the euro price down nearly €10.   Ahead of New York’s opening, gold was trading in London at $1,181.60 and in the euro at €1,085.73.

The silver price closed at $16.73 up 60 cents. Ahead of New York’s opening it was trading at $16.70 .The silver price showed how quick it can turn up as support held firm.

The widening of support for the AIIB [the Asian equivalent of the I.M.F./World Bank] was not the only piece of Asian news last week. Something considerably more dramatic took place, something we at Gold Forecaster and Silver Forecaster have been pointing to for several years now as a structural change in the world monetary order. So far it has not been reported in the media or gold world. Once it happens, gold and silver prices will see a major change in their fundamentals. We will expound on this once we have first informed subscribers.

As to Greece, another stressful week for the country takes place. The country will run out of money by the end of April. This news alone should empty the banks of deposits. By blocking the exit of capital now, they may be able to salvage a viable banking sector, but will they? While the credit position of Greece may be a great emotional issue, we would have expected the Greek government to have accepted the reality of their situation and the fact that their debt is un-repayable and already exited the E.U. Clearly political face saving is going on as the government did commit to staying in the E.U. An exit must have the element of surprise to stop capital leaving, so could happen any time now.

LBMA Gold Price setting without Chinese banks a huge mistake?

Julian Phillips comments on the gold and silver markets on a day on which the new LBMA Gold Price benchmark came into play – first set at $1171.75 this morning in London

New York closed yesterday at $1,170.30 barely changed on yesterday’s close. Asia has held it there too before London opened. Today is an historic day again because it sees the start of the new Fixing process. It does not have the Chinese banks as participants, which could prove a mistake. But they may be added later. This morning the first ever “LBMA gold price” was set at $1,171.75.   Ahead of New York’s opening, gold was trading in London at $1,172.50 and in the euro at €1,094.57.

The silver price closed at $16.13 up 7 cents. Ahead of New York’s opening it was trading at $16.20.  Its trading range is narrowing pointing to another strong move shortly, either way.

There were no purchases or sales of gold into the SPDR gold ETF but there was a purchase of 0.69 of a tonnes of gold into the Gold Trust on Thursday. The holdings of the SPDR gold ETF are at 749.774 tonnes and at 164.71 tonnes in the Gold Trust.  After the retreat in the U.S. dollar index from over 100 to 98.81, the dollar index has begun to look toppy.

Most U.S. gold investors will continue to see U.S. economic and currency strength as moving in the opposite direction to the gold price, but the physical volumes of gold traded there do not warrant such unbalanced pricing power. It is only the structure of the gold market that has permitted this.

Today, the new “Gold Fix”, now the “LBMA gold price” comes into effect. As we said above, there are no Chinese bank participants but they may be added later. We believe that this is a mistake of huge proportions for the gold market. It brings to the stage the possibility of China competing for supplies against London. We will have to wait for a gold price that accurately reflects global demand and supply and not speculative interests. But today we see some underlying strength in the gold price.

Another significant change in the global financial scene is the number of supporters of the Asian equivalent of the World Bank/IMF. The leading European nations plus the U.K. and potentially Japan are keen to become supporters of this despite the opposition of the U.S.

As to Greece, the dominant Eurozone issue today, we have to say that a nation of 11 million people, with no significant industries barring tourism, cannot repay €250 billion no matter how you swing it and even if Greek tax evaders paid their taxes. One commentator said the only option is to have an orderly withdrawal of Greece from the E.U. The length of time this issue has occupied the E.U. tells us that plans are already formulated for this. Alternatively, Greece will leave suddenly and impose Exchange Controls. We watch as the political charade continues to grind on.

Julian D.W. Phillips for the Gold & Silver Forecasters – www.goldforecaster.com and www.silverforecaster.com

Greece under extraordinary pressure – default and Grexit ahead?

Julian Phillips’ latest analysis of the gold and silver markets and the geopolitical factors affecting them.

With payments due to the IMF from Greece this week and further steady erosion of the capital base of the country happening through to April, Greece is under extraordinary pressure to buckle and do as they are told by the E.U., despite the election results. The ongoing crisis is helping the E.C.B. objective of pushing the euro down. We expect this to continue. However on Friday we saw the gold price fall slow down and turn up, despite the sinking euro. Asian demand is coming in at this level. If this demand continues, we will see the formation of a bottom in preparation for a strong move either way.  Greece’ plans to follow through on the agreement with the E.U. appear now to be vague and without substance. We ask, “Is this due to a lack of intent or due to the inability of the government to act effectively?” It is difficult to get away from the conclusion that either way, that a default is a near certainty and that Greece, willingly or unwillingly, will exit the E.U. This issue will continue to stumble on for some time to come still to the benefit of the E.U. and a weaker euro.

Another issue that must be nearing rupture point is not just the rise of the dollar against other currencies but the rise of the Yuan with it. We saw the surprise move of Switzerland when it did not want to continue to see the Swiss Franc fall with the euro. Similar pressures are building in China as the Yuan appreciates alongside the dollar. We expect some action from the People’s Bank of China soon on this issue.

But the biggest event affecting the gold price starts on Friday when the London Gold Fix changes and, we asume,  the big Chinese gold banks join the fray.

Markets and SPDR gold ETF

New York closed on Friday at $1,155.20 up $1.90 with Asia taking it up to $1,162 at the start of the week. The euro was holding closing levels in New York at $1.05. London took gold back to $1,158 ahead of the Fix where it was set at $1,157.00 up $0.50 and in the euro, at €1,097.671 up €6.427, while the euro was at $1.0540 down almost half a cent.  Ahead of New York’s opening, gold was trading in London at $1,157.00 and in the euro at €1,098.71.

The silver price closed at $15.57 unchanged on Friday. Ahead of New York’s opening it was trading at $15.65.

There were sales of 0.247 tonnes of gold from the SPDR gold ETF but none from the Gold Trust on Friday. The holdings of the SPDR gold ETF are at 750.670 tonnes and at 164.02 tonnes in the Gold Trust.

Julian D.W. Phillips for the Gold & Silver Forecasters – www.goldforecaster.com and www.silverforecaster.com

New York market sees little physical gold activity but still drives prices

Julian Phillips’ update on what has been/is happening in the major precious metals markets and with the big SPDR gold ETF

New York closed yesterday at $1,153.30 down$0.70 as the gold price began to stabilize as did the euro for now. Asia lifted the gold price to $1,159 and London held it there before it was Fixed at $1,156.50 down $4.75 and in the euro, at €1,091.244 down €3.655, while the euro was at $1.0598, almost unchanged.  Ahead of New York’s opening, gold was trading in London at $1,156.45 and in the euro at €1,092.07.

The silver price closed at $15.57 up 7 cents. Ahead of New York’s opening it was aslo trading at $15.57.  Silver is currently seeing a more positive tone than gold.

There were sales of 2.09 tonnes of gold from the SPDR gold ETF but none from the Gold Trust on Thursday. The holdings of the SPDR gold ETF are at 750.947 tonnes and at 164.02 tonnes in the Gold Trust.  The euro now stands at $1.0586 and, as we wrote this, was starting to slide again.

Asian demand was seen again before London’s opening which indicates a ‘bottoming’ is now taking place. With today being the most active day of every week and the superstitious noting it is 13th with the ‘ides of March’ on Sunday, today could be interesting! Of course this should have no impact on Asian markets which have their own superstitions, making life complicated.

During the past few weeks we have noticed Asia showing either strength or holding steady, then London at best, holds the gold price steady or starts its fall. New York starts to push prices down rapidly and may then recover towards the end of the day.

And yet, New York see very little physical gold action currently. This is primarily due to inefficiencies in the structure of the markets. If the prices in the different centers truly reflected net demand and supply figures, rather like water finding a common level between joined dams, they would smooth out differences.

In the gold market there remains a need for arbitrageurs in the different markets to have pools of accessible liquidity to make this happen. This may start to when the London Gold Fixing process changes next Friday.

A harsh reality is now coming into the Greek debt crisis. The Prime Minister has stated that the only solution for Greece’s debt is to re-structure it. History shows that the only time this has happened is when a country has already defaulted. Only then will creditors try to salvage what they can through extraordinary debt measures. Today’s meeting on the subject may be one of the last straws before Greece’s default. Then what?

Julian D.W. Phillips for the Gold & Silver Forecasters – www.goldforecaster.com and www.silverforecaster.com

 

Gold – down in dollars but up in Euros

Julian Phillips commentary for today on movements in the gold and silver markets and their respective price drivers.

Gold

New York closed yesterday at $1,166.90 up $1.20 in a thin market but with more heavy ETF sales, but still dominated by currency issues. Asia took the gold price down to $1,158.00 before London opened. London then Fixed the gold price at $1,161.00 down $13.75 and in the euro, at €1,079.398 up €1.426, while the euro was at $1.0756, down another one and a quarter cents. Ahead of New York’s opening, gold was trading in London at $1,164.00 and in the euro at €1,083.55.

Silver

The silver price closed at $15.79 down 8 cents. Ahead of New York’s opening it was trading at $15.75.

SPDR Gold ETF

There were sales of 3.284 tonnes of gold from the SPDR gold ETF and of 0.6 of a tonne from the Gold Trust on Monday. The holdings of the SPDR gold ETF are at 753.037 tonnes and at 164.86 tonnes in the Gold Trust.  Once again the ETF sales dominated as the euro continued to fall and the dollar to surge up to 98.38, up from 96.80 last week.

The euro continues to tumble as it sits at $1.0742 and headed lower, currently taking gold down with it. As you see gold is now rising in the euro and falling in the dollar.

With financial markets closed to it and the Greek central bank keeping its banks on a tight leash, the Greek treasury could face a cash crunch in one, two or three weeks. Greece won’t get any more cash from its €240 billion ($260 billion) rescue program until its official creditors are satisfied that the Greek Prime Minister is committed to all the economic fixes needed to meet its conditions. After the swagger of the government’s election are we watching Greece put firmly in its place? Or will they go to a referendum to get support for a Greek exit from the Eurozone? Or will they wait until they see funding finally halt and have to return to the Drachma. The issue is not off the table by any means. An exit, we feel will see a stronger euro.

There was little Asian demand for gold, despite bargain prices. Perhaps they are waiting for even better bargains. We see demand rising when a bottom is set in place. What is for sure is that Asian demand has not gone away.

Again we expect the next fortnight to continue to be a volatile one, in both currency and precious metal markets.

We see the silver price continuing to fall with gold but not at the same pace, we feel. Once Asian demand comes in we expect the silver price to recover quickly.

Julian D.W. Phillips for the Gold & Silver Forecasters – www.goldforecaster.com and www.silverforecaster.com

 

Will Asia take the gold price higher?

Julian Phillips’ latest daily commentary on what is happening in the gold and silver markets and geopolitical factors affecting the prices of gold and silver.

Ahead of London’s opening Asia made the play once again, as the gold price was lifted over $1,214 ahead of London’s opening. When we look back to last week, we saw the gold price unwilling to fall below $1,200 and that was in the absence of Chinese demand. Technical buying in the States was sufficient to hold it there, as the rest of the world was unwilling to push it down, despite the temporary resolution of the Greek bailout crisis. Now that robust demand is back in China and ahead of the Indian budget in the next week we are watching to see if Asia is simply buying at bargain prices or willing to take the gold price higher.

The Greek bailout issue in 4 months can blow open completely again, when the postponement ends. The yoke of oppressive debt will stay with Greece for a very long time unless it takes action to break free and turn its economy around by returning to the Drachma. The Greek Finance Minister has scotched such a possibility saying Greece will do all it can to stay in the Eurozone. So, right now, the Greece issue will no longer have an impact on the gold price, for at least 4 months.

Our attention now turns to India for news that will directly impact the gold price. Smuggling gold is almost institutionalized there for the history of disobeying government and its bureaucrats on gold and the dark side of Indian finances goes back more than a generation. It therefore now makes sense for the government of India to lower duties back to 2% from 10% because the volume of smuggled gold into India will now revert to ‘official’ routes and reflect on the Balance of Payments. With the much lower oil price reducing India’s trade deficit dramatically gold imports can reflect on the B of P without impacting the Rupee, indeed such action may restrain the appreciation of it. So, all eyes are now on Mr. Modi, to see if he lowers duties on gold and boosts gold imports to the country.

Markets and SPDR ETF

New York closed yesterday at $1,204.60 up $2.50. London Fixed the gold price at $1,220.00 up $13.50 and in the euro, at €1,073.660 up €11.6, while the euro was almost unchanged at $1.1363. Ahead of New York’s opening, gold was trading in London at $1,217.00 and in the euro at €1,071.87.

The silver price closed at $16.54 up 22 cents. Ahead of New York’s opening it was trading at $16.82. We suspect that the silver price will not stop following the direction of the gold price.

There were no purchases or sales into or from the SPDR gold ETF but there was a sale of 1.5 tonnes from the Gold Trust on Wednesday. The holdings of the SPDR gold ETF are at 771.249 tonnes and at 166.43 tonnes in the Gold Trust.

Julian D.W. Phillips for the Gold & Silver Forecasters – www.goldforecaster.com and www.silverforecaster.com  

More technical purchases swell SPDR gold ETFs

Julian Phillips notes more purchases into the big SPDR gold ETFs despite the weak gold price which, in turn, was not helped by a supposed short term solution to the Greek financial crisis.

There were purchases of 2.986 tonnes into the SPDR gold ETF and 0.9 of a tonne into the Gold Trust on Friday in what we see as a Technical purchase as markets continue solely under the influence of developed world markets until the second half of this week. The holdings of the SPDR gold ETF are at 771.249 tonnes and at 167.93 tonnes in the Gold Trust.  We expect current levels of the gold price and maybe lower prices to continue this week, but we believe that such prices will attract Asian demand when China is back from holiday and certainly if duties on imports of gold are lowered in the Indian budget this weekend. Until then speculators and traders eyes will be on the €: $ exchange rate for guidance on the gold price.

At the moment the euro stands at $1.1310 pointing lower after the events at the final part of last week. To say the least, the picture that came out of the extension for 4 months of the bailout to Greece, is confusing. Did the Greek government get defeated by the E.U.? Does it mean that for 4 months the two sides will thrash out a new agreement? Has Greece committed itself to staying in the E.U. irrespective of new talks? Will the brinkmanship we saw last week continue after 4 months? Can Greece still leave the E.U. if they are not happy with further talks? Certainly, to commit to staying in the E.U. no matter what, is at odds with thrashing out a new agreement. It all depends on the political strength of the new government for without an open option to return to the Drachma, the Greek government has shot itself in the foot in terms of negotiating power. Today’s list of measures the Greek government will take to move forward on reforms gives the E.U. the power to decide the way forward. Will it be enough and if not will the issue blow up again tomorrow? With politicians at the helm nothing will be straightforward.

More importantly for our readers what impact will this have on the gold price? We believe that the Greece issue will not have an impact on the gold price unless Greece’s future in the euro and the Eurozone is directly threatened, as it was last week. This cannot happen for 4 months now. Should it happen again the influence on the gold price will come through the euro against the dollar exchange rate. For now the influence on the euro’s exchange rate with the dollar will revert to the E.C.B.’s Q.E. set to start next month.

Markets

New York closed Friday at $1,201.00 down $7.40. London Fixed the gold price at $1,193.50 down $10.00 and in the euro, at €1,055.168 down €6.213, while the euro was weaker at $1.1311. Ahead of New York’s opening, gold was trading in London at $1,193.30 and in the euro at €1,055.22.

The silver price closed at $16.23 down 16 cents. Ahead of New York’s opening it was trading at $16.12.  We see silver as continuing to follow the gold price and be influenced by the factors that influence the gold price. As such we expect to see lower prices until Asian demand returns to the gold market.

 

Julian D.W. Phillips for the Gold & Silver Forecasters – www.goldforecaster.com and www.silverforecaster.com