Huge gold purchase into GLD fails to boost price

 

 Gold Today –New York closed at $1,279.20 yesterday after closing at $1,290.10 Tuesday. London opened at $1,279.15 today. 

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

         The $: € was weaker at $1.0766 after yesterday’s $1.0724: €1.

         The Dollar index was weaker at 99.46 after yesterday’s 99.66

         The Yen was weaker at 109.03 after yesterday’s 108.99:$1. 

         The Yuan was slightly stronger at 6.8837 after yesterday’s 6.8854: $1. 

         The Pound Sterling was weaker at $1.2833 after yesterday’s $1.2857: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    4    20

     2017    4    19

     2017    4    18    

SHAU

SHAU

SHAU

/

286.11

286.04

/

285.75

286.03

$ equivalent 1oz @    $1: 6.8837

       $1: 6.8854

       $1: 6.8847

      

  /

$1,292.45

$1,292.26

/

$1,290.82

$1,292.22

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.]

 The Shanghai Gold Exchange was trading at 285.90 towards the close today. This translates into $1,286.82. While New York and London were pulled lower by Shanghai yesterday and today you will note that Shanghai has barely changed in the last two days.

New York closed $7.62 below Shanghai’s closing yesterday and today. London opened at a $7.67 discount to Shanghai in line with New York.

Shanghai continues to lead the way in the gold markets, barely changing its prices over the last two days, despite very heavy buying in New York into the U.S. based gold ETFs and the dollar weakening. We feel it is important to factor the current dominance of Shanghai’s pricing of gold over that of London and New York.  In line with this, we expect Shanghai to exert an upward pull on New York and London’s prices for the rest of this week.

This pull of Shanghai’s gold prices may grow in the coming months as the Chinese government has now committed itself to a stable Yuan [primarily against the U.S. Dollar.] It has separated broad Capital Controls from individual investment requests to invest overseas. Investments that directly benefit the Chinese economy will continue and remain unaffected by Controls, as permission for non-China benefitting investments which will continue to be refused. Already this is stabilizing the Yuan and will continue to do so as the Chinese economy is now growing on a stable footing, once more. Hence we expect the Yuan to remain at less than 7.00 to the U.S. dollar for the foreseeable future.

LBMA price setting:  The LBMA gold price was set today at $1,279.90 from yesterday’s $1,282.05.  

The gold price in the euro was set at €1,191.05 after yesterday’s €1,195.72.

Ahead of the opening of New York the gold price was trading at $1,278.60 and in the euro at €1,189.73. At the same time, the silver price was trading at $18.20. 

Silver Today –Silver closed at $18.14 yesterday after $18.32 at New York’s close Tuesday.

 Price Drivers

The dollar continues to weaken and U.S. buyers are now piling into the SPDR gold ETF and the Gold Trust and yet the gold price fell in New York. If Shanghai continues to exert pricing power over the gold price as we see now, U.S. physical buying and selling will have a decreasing effect on the gold price. We expect less volatility in gold prices if this comes to be. This is a significant change in the structure of the gold price. We are watching to see if this change becomes permanent or is simply a short term factor.

If we are right, then we expect the gold price to recover in New York and London soon, as the factors that have caused gold prices to rise in the past [a weak dollar and U.S. physical demand] are in place right now.

With the French elections coming up this weekend some believe that the euro is soon to fall. If Marine le Pen is elected to the Presidency in the second round of the elections, the future of the Eurozone will be in doubt. With the Polls indicating that Macron is more likely to pick up the votes of the other two defeated candidates, the prospects of a Le Pen Presidency looks unlikely.

Gold ETFs – Yesterday saw purchases of a huge 11.842 tonnes into the SPDR gold ETF (GLD) and a purchase of 0.9 of a tonne into the Gold Trust (IAU). Their holdings are now at 860.763 tonnes and at 204.36 tonnes respectively.

Since January 6th 2017 53.713 tonnes have been added to the SPDR gold ETF and the Gold Trust.

Julian D.W. Phillips 

 GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance 

Gold: Ascending top breakout confirmed

Gold Today –New York closed at $1,272.60 yesterday after closing at $1,254.30 Monday. London opened at $1,273.4 today. 

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

         The $: € was weaker at $1.0621 after yesterday’s $1.0608: €1.

         The Dollar index was weaker at 100.61 after yesterday’s 100.90

         The Yen was stronger at 109.70 after yesterday’s 110.66:$1. 

         The Yuan was stronger at 6.8943 after yesterday’s 6.9012: $1. 

         The Pound Sterling was stronger at $1.2497 after yesterday’s $1.2416: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    4    12

     2017    4    11

     2017    4    10    

SHAU

SHAU

SHAU

/

281.14

280.96

/

281.53

281.52

$ equivalent 1oz @    $1: 6.8943

       $1: 6.9012

       $1: 6.9019

      

  /

$1,267.09

$1,266.28

/

$1,268.85

$1,268.67

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.]

 The Shanghai Gold Exchange was trading at 284.30 towards the close today.

This translates into $1,277.61. New York is trading at a $5.01 discount to Shanghai and London opened at a $4.21 discount to Shanghai.

With the New York close $9 higher than Shanghai’s opening today Shanghai had to chase gold prices higher. Likewise London had to lift prices strongly at the opening or risk arbitrageurs moving into buy heavily. It may have been either the Chinese ICBC or the global HSBC that took what stock they could off the market before the London opening to even out London’s prices with Shanghai.

LBMA price setting:  The LBMA gold price was set today at $1,272.30 from yesterday’s $1,255.70.  

The gold price in the euro was set at €1,199.94 after yesterday’s €1,183.28.

Ahead of the opening of New York the gold price was trading at $1,275.50 and in the euro at €1,203.53. At the same time, the silver price was trading at $18.33. 

Silver Today –Silver closed at $18.28 yesterday after $17.94 at New York’s close Monday.

Price Drivers

We were wrong about more consolidation yesterday. Consolidation is a very difficult process to gauge accurately in terms of timing. It is a process of demand matching supply to the point where a small sale or purchase can make the next move a strong one. We did not realize that this point was reached yesterday, suddenly. After all it has been several weeks since the gold price has been building up sufficient strength to effectively tackle overhead resistance at $1,260, the 200-day average. Yesterday saw it do so, when an ascending top breakout was confirmed technically.

The global political scene was turned combative by Trump’s tweet that North Korea is looking for trouble. After Trump’s punitive strike in Syria, it seems plausible that he is capable of doing the same in North Korea.  Safe haven assets are now in play. These include the Japanese Yen, a haven that will be fought by Japan’s central bank, which we expect will intervene in the exchange rate now. This brings gold center stage alongside the less international silver.

The dollar is weaker, but not so much against the euro to make the upward move a dollar play, as the euro price of gold hits 1,200.  U.S. gold investors came in with a large, but not huge, set of purchases into the U.S. based gold ETFs, but this was sufficient to break through overhead resistance.

India

Gold imports by India jumped in March from a year earlier as jewelers stocked up anticipating a demand recovery during the wedding season that began this month and the Akshaya Tritiya festival. Shipments advanced 582.5% to 120.8 metric tons last month from a year earlier. Buying should rise heading into Akshaya Tritiya that falls toward the end of April this year. The availability of new banknotes is reaching the level of the old now illegal tender notes to ‘normal levels in May.

Gold refiners continue to work 24/6 to meet Indian and Chinese demand.

Gold ETFs – Monday saw purchases of 1.77 tonnes of a tonne into the SPDR gold ETF (GLD). Yesterday another 3.88 tonnes were taken into GLD.  The Gold Trust (IAU) a purchase of 1.o5 tonnes yesterday. Their holdings are now at 842.41 tonnes and at 201.67 tonnes.

 Julian D.W. Phillips 

 GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance 

Gold jumps on US missile strike

Gold Today –New York closed at $1,251.70 yesterday after closing at $1,256.10 Tuesday. London opened at $1,264.00 today. 

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

         The $: € was stronger at $1.0638 after yesterday’s $1.0664: €1.

         The Dollar index was stronger at 100.71 after yesterday’s 100.60

         The Yen was stronger at 110.65 after yesterday’s 110.77:$1. 

         The Yuan was slightly stronger at 6.8992 after yesterday’s 6.8995: $1. 

         The Pound Sterling was slightly weaker at $1.2465 after yesterday’s $1.2475: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    4      7

     2017    4      6

     2017    4      5    

SHAU

SHAU

SHAU

/

280.38

280.13

/

280.42

280.13

$ equivalent 1oz @    $1: 6.8992

       $1: 6.8995

       $1: 6.8892

      

  /

$1,263.97

$1,264.24

/

$1,264.15

$1,264.28

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.]

 Gold was trading on the Shanghai Gold Exchange at RMB282.24 towards the close.

This translates into $1,267.41. New York is trading at a $15.71 discount to Shanghai and London opened at a $3.41 discount to Shanghai. The close in New York was before the missile strikes in Syria.

LBMA price setting:  The LBMA gold price was set today at $1,264.30 from yesterday’s $1,253.75.  

The gold price in the euro was set at €1,189.37 after yesterday’s €1,174.58.

Ahead of the opening of New York the gold price was trading at $1,262.70 and in the euro at €1,188.09. At the same time, the silver price was trading at $18.35. 

Silver Today –Silver closed at $18.23 yesterday after $18.30 at New York’s close Wednesday.

Price Drivers

Overnight, the U.S. struck Syria with cruise missiles on President Trump’s order. The global political situation has degenerated, at least for now, causing gold to jump through the 200-day average. Will this hold? At first glance, we would think not, as it is not a cause for war between Russia and the U.S. simply a punitive strike, in response to the use of chemical weapons in what is more than a civil war in Syria. It is, to us, a long term middle east wide religious war between Shia [Assad/Iran, etc] and Sunni [rebels/Saudis, etc] sides of Islam set to continue for the foreseeable future.

The initial market reaction is to see it as the beginning of another longer term U.S. operation in the Middle East, but we expect markets to calm down as they see it as a one-off strike. Gold and silver are likely to retreat as matters calm down, but how far?

However, if gold does hold at current levels today, over $1,260, then the 200-day average will prove to be support and prices likely to rise.

With the Jobs report out today in the U.S. we may see efforts to pull gold and silver prices back. The news that the U.S. economy is strong is discounted in the market, perhaps too much so. As the Fed warned of overvaluations in equity markets it is possible the Jobs report has no effect on gold and silver prices.

Thus today could be a volatile day for precious metals as there is a lot of emotional content right now.

Gold ETFs – Yesterday saw no purchases or sales into or from the SPDR gold ETF but purchases of 0.45 into the Gold Trust.  Their respective holdings are now at 836.765 tonnes and 200.26 tonnes. 

Julian D.W. Phillips 

 GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance 

Gold resistance now support

Gold Today –New York closed at $1,253.20 yesterday after closing at $1,247.30 Friday. London opened at $1,258.20 today. 

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

         The $: € was stronger at $1.0657 after yesterday’s $1.0670: €1.

         The Dollar index was stronger at 100.61 after yesterday’s 100.48

         The Yen was stronger at 110.47 after yesterday’s 111.34:$1. 

         The Yuan was unchanged at 6.8836: $1. 

         The Pound Sterling was weaker at $1.2437 after yesterday’s $1.2508: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    4      4

     2017    4      3

     2017    3    31    

SHAU

SHAU

SHAU

/

/

279.24

/

/

280.70

$ equivalent 1oz @    $1: 6.8836

       $1: 6.8831

      

  /

/

$1,261.83

/

/

$1,263.91

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.]

 Today the Shanghai Gold Exchange remains closed and will be closed until Wednesday for “Tomb Sweeping Day”. Hence there are no prices to report. As a result yesterday and today’s prices reflect New York and London’s prices only.

LBMA price setting:  The LBMA gold price was set today at $1,258.65 from yesterday’s $1,246.25.  

The gold price in the euro was set at €1,183.16 after yesterday’s €1,169.42.

Ahead of the opening of New York the gold price was trading at $1,258.45 and in the euro at €1,181.92. At the same time, the silver price was trading at $18.36. 

Silver Today –Silver closed at $18.22 yesterday after $18.21 at New York’s close Friday.

Price Drivers

With Shanghai closed yesterday and today, the gold price jumped up and away from support into the higher $1,250’s this morning. This was primarily driven by a nearly four and a half tonne purchase into the gold ETF. So many times, in the past, we have seen such points of inflection result in ‘bear’ raids. But this time it was the bulls which came in.  And they came in with physical demand.

Some believe that it is COMEX that makes prices and until Shanghai’s influence grew to the current point, this was so, but with the phenomenal growth in physical volumes, then Shanghai making it expensive to speculate in volume and increasing the risks of doing so in the process, the evidence in 2017 is that the influence of COMEX on gold prices is waning.

Imagine, if oil prices were determined by speculation in ‘paper’ oil on COMEX, while physical demand and supply were trading at significantly different prices, how long would it be before the credibility of COMEX disappeared? In the gold market on COMEX one cannot hold a contract until maturity and then expect physical delivery. One can only settle the prices in cash, for 99.96% of contracts. Physical delivery on COMEX requires notifying the exchange of that expectation and then findinga physical supplier before the contract can be finalized. In other words, COMEX is a cash market, not a gold market!

What we do expect to see is that other exchanges are switching from basing contracts on the LBMA price setting to Shanghai’s Fixings. Dubai and other exchanges have done it, we expect others to follow. In addition sellers and buyers of physical gold will follow suit and ignore the London/New York prices if they fell out of line with Shanghai, a primarily physical market. Certainly, with higher Shanghai prices suppliers will prefer to sell into Shanghai and base sale prices to London or elsewhere on Shanghai prices!

South Africa rated as ‘Junk’

Further to our story on South Africa’s President Zuma’s cabinet re-shuffle, the S&P ratings agency has downgraded South African debt to Junk status. We expect the other rating agencies to follow. The Rand has fallen further to $1: 13.87. We expect further falls.  As a result the South African mining industries hope that President Zuma stays in office for a long time, taking the Rand even lower and increasing their profits. Alas, his tenure may be short going forward. But this is Africa, so let’s see!

Gold ETFs – Yesterday saw purchases of 4.441 tonnes into the SPDR gold ETF but no sales or purchases from or into the Gold Trust.  Their respective holdings are now at 836.765 tonnes and 199.85 tonnes. 

The purchases into the SPDR gold ETF at the point where demand and supply are so closely in balance was the catalyst that caused gold to jump out of consolidation into a rising market. If further purchases follow we expect to see strong rises higher.

Since January 4th 2016, 235.585 tonnes of gold have been added to the SPDR gold ETF and to the Gold Trust.  Since January 6th 2017 25.529 tonnes have been added to the SPDR gold ETF and the Gold Trust.

Julian D.W. Phillips 

 GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance 

Gold holding higher levels. Set for a further rise?

Gold Today –New York closed at $$1,255.30 yesterday and at 1,247.90 on the 24th March, after closing at $1,246.20 on the 23rd March. London opened at $1,253.00 today. 

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

         The $: € was unchanged at $1.0863: €1 from $1.0798: €1 Friday.

         The Dollar index was slightly stronger at 99.17 from 99.73 Friday. 

         The Yen was slightly weaker at 110.29:$1 from Friday’s 111.20 against the dollar. 

         The Yuan was stronger at 6.8804: $1, from 6.8877: $1, Friday. 

         The Pound Sterling was stronger at $1.2554: £1 from Friday’s $1.2490: £1.

Yuan Gold Fix

Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    3    28

     2017    3    27       2017    3    24

    2017     3   23

SHAU

SHAU

SHAU

SHAU

/

280.04

277.99

277.93

/

280.61

277.94

278.38

$ equivalent 1oz @    $1: 6.8804

      $1: 6.8758

      $1: 6.8877

 $1: 6.8860

  /

$1,266.79

$1,255.35

$1,255.39

/

$1,267.18

$1,257.12

$1,257.42

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 standing at Yuan 280.60, which directly translates into $1,268.48. But allowing for the difference in fineness of gold being traded this equates to a price of $1,263.48. This more than $8.18 higher than the New York close and $10.48 higher than London.

Shanghai is steady at higher levels today as the Trump/Republican defeat continues to be digested. As you can see there was a $15 jump in the price yesterday, which we expect to filter through to London and New York this week.  The margins are more than enough for arbitrageurs to profit from, so the process may be quick.

LBMA price setting:  The LBMA gold price was set today at $1,253.65 from Friday’s $1,244.00.  

The gold price in the euro was set at €1,154.01 after Friday’s €1,151.53.

Ahead of the opening of New York the gold price was trading at $1,257.55 and in the euro at €1,157.75. At the same time, the silver price was trading at $18.16. 

Silver Today –Silver closed at $18.10 at New York’s close yesterday against $17.74 on the 24th March.

Price Drivers

With the failure of Trump and the Republicans to pass the repeal of the Obamacare bill Friday makes this week a week of digestion of the fact and reaction to it.

For gold, before London opened on Monday Shanghai had already reacted through the western night. It was at $1,257 when we first looked during Shanghai’s day on Monday and is currently holding that level now.   If it holds above $1,250 it will have broken through overhead resistance, which will become support, which appears to be happening now.

This week see the monthly options expiry which while being a short term influence demonstrates the net long or short position of the paper market. It looks as if we will see higher gold prices from it as the short and longs net out.

The Healthcare Bill is not just about healthcare or about Donald Trump but about the ability of the Republican majority to turn what has been political gridlock for the last two terms into decisive government. Because the bill failed to pass the markets are confirming our view that despite the hype about President Trump’s ‘get things done’ ability, the government remains in political gridlock, with the majority disunited. We expect him to switch to election promises that he believes will pass to he can regain some lost political momentum.

We are seeing a lower dollar and expect lower equities in the days to come [where the rise since his election accounts for 14% of the rise in the Dow] and higher gold.

Gold ETFs – Friday saw purchases 0f 1.776 tonnes into the SPDR gold ETF and purchases yesterday of 2.665 tonnes but no change in the holdings of the Gold Trust.  Their respective holdings are now at 835.285 tonnes and 198.72 tonnes. 

 Julian D.W. Phillips 

 GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance

Gold – Facing a Critical Day

 Gold Today –New York closed at $1,246.20 yesterday after closing at $1,247.80 on the 22nd March. London opened at $1,243.00 today. 

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

         The $: € was weaker at $1.0798: €1 from $1.0787: €1 yesterday.

         The Dollar index was weaker at 99.73 from 99.77 yesterday. 

         The Yen was slightly weaker at 111.20:$1 from yesterday’s 111.15 against the dollar. 

         The Yuan was weaker at 6.8877: $1, from 6.8860: $1, yesterday. 

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

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    3    24

     2017    3    23       2017    3    22

SHAU

SHAU

SHAU

/

277.93

278.38

/

278.38

278.46

$ equivalent 1oz @  $1: 6.8877

      $1: 6.8860

$1: 6.8845

  /

$1,255.39

$1,257.69

/

$1,257.42

$1,258.05

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 volatile between 277.6 and 278.6 Yuan, but standing at Yuan 278 as we wrote this, which directly translates into $1,255.39. But allowing for the difference of gold being traded this equates to a price of $1,250.39. This more than $9.19 higher than the New York close and $12.39 higher than London.

LBMA price setting:  The LBMA gold price was set today at $1,244.00 from yesterday’s $1,247.90.  

The gold price in the euro was set at €1,151.53 after yesterday’s €1,156.75.

Ahead of the opening of New York the gold price was trading at $1,245 00 and in the euro at €1,153.15 At the same time, the silver price was trading at $17.62. 

Silver Today –Silver closed at $17.58 at New York’s close yesterday against $17.53 on the 22nd March.

Price Drivers

It looked as though gold had broken through $1,250 before the opening of New York yesterday, but this was not to be, so it seems. Overhead resistance kicked in again at $1,250. So what lies ahead in the next few days for gold?

  1. The first is the monthly options expiry which demonstrates the net long or short position of the paper market. In itself, in the short term, it does influence prices. At the moment the longs seem to be better weighted implying higher prices.
  2. The Healthcare Bill is not just about healthcare or about Donald Trump but about the ability of the Republican majority to turn what has been political gridlock for the last two terms into decisive government. If the bill fails to pass today, it implies that despite the hype about President Trump’s ‘get things done’ ability, the government remains in political gridlock, with the majority disunited. That implies a lower dollar, lower equities [where the rise since his election accounts for 14% of the rise in the Dow] and higher gold.

Either way these two factors go, will see the gold price move strongly, one way or the other.

And that’s ignoring one of Italy’s Finance minister’s call that if Marie le Pen wins the French Presidency the E.U. will fall apart and the euro will collapse.  But then politics is always dramatic full of sound and fury….

So today is critical for all financial markets and for the ability of President Trump ‘to make America great again’.

Gold ETFs – Yesterday saw no purchases or sales into or from the SPDR gold ETF but a purchase of 0.3 of a tonne into the Gold Trust.  Their respective holdings are now at 834.396 tonnes and 198.72 tonnes. 

Since January 4th 2016, 232.086 tonnes of gold have been added to the SPDR gold ETF and to the Gold Trust.  Since January 6th 2017 22.03 tonnes have been added to the SPDR gold ETF and the Gold Trust.

 Julian D.W. Phillips –  GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance 

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

SHAU

SHAU

SHAU

/

278.38

275.97

/

278.46

275.98

$ equivalent 1oz @  $1: 6.8860

      $1: 6.8845

$1: 6.8968

  /

$1,257.69

$1,244.58

/

$1,258.05

$1,244.62

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

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 

 GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance 

Shanghai now the world’s gold hub

 

Gold Today –New York closed at $1,244.60 yesterday after closing at $1,234.60 on the 20th March. London opened at $1,247.00 today. 

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

         The $: € was weaker at $1.0802: €1 from $1.0793: €1 yesterday.

         The Dollar index was weaker at 99.77 from 100.06 yesterday. 

         The Yen was stronger at 111.48:$1 from yesterday’s 112.86 against the dollar. 

         The Yuan was stronger at 6.8845: $1, from 6.8968: $1, yesterday. 

         The Pound Sterling was stronger at $1.2472: £1 from yesterday’s $1.2380: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    3    22

     2017    3    21       2017    3    20

SHAU

SHAU

SHAU

/

275.97

276.75

/

275.98

276.93

$ equivalent 1oz @  $1: 6.8845

      $1: 6.8968

$1: 6.9051

  /

$1,244.58

$1,246.60

/

$1,244.62

$1,247.41

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 278.50 Yuan, which directly translates into $1,258.23. But allowing for the difference of gold being traded this equates to a price of $1,253.23. This more than $13.63 higher than the New York close and $6.23 higher than London.

The gold price in Shanghai jumped 2.50 Yuan today, but the rise was greater when translated into the weak dollar. As you can see, London and New York are trying to catch up with Shanghai as the price differentials narrow.  That’s why the concept of a ‘Chinese gold price premium’ distorts the reality of what’s happening. China is no longer a distant sub-market of London, while India continues to be so, as that country with its gold taxes and political interference cannot function nearly as well as Shanghai with its highly developed, huge, physical market. As we have pointed out in the past, Shanghai has become the world’s gold hub. It would therefore be more accurate as description to describe New York and London trading at a ‘discount’ to Shanghai.

LBMA price setting:  The LBMA gold price was set today at $1,246.10 up from yesterday’s $1,232.05.  

The gold price in the euro was set at €1,154.76 after yesterday’s €1,139.94.

Ahead of the opening of New York the gold price was trading at $1,245.45 and in the euro at €1,154.58 At the same time, the silver price was trading at $17.49. 

Silver Today –Silver closed at $17.52 at New York’s close yesterday against $17.42 on the 20th March. Silver prices continue rising but not quite as fast as gold’s dollar prices.

Price Drivers

Gold is responding to a weak dollar, but also to buying by the U.S.

Chinese demand kicked in overnight too, helping the gold price rise. Chinese continues to dominate gold prices pulling gold prices higher in the developed world.

The wave of euphoria after the election of Trump in the U.S. and world markets is faltering. U.S. equity markets are pulling back as the promised ‘firing from the hip’ at the establishment alongside huge tax cuts and infrastructure spending, have not yet happened. With President Trump finding it hard going to do away with Obamacare, the potential hurdles that lie ahead look like slowing down his program and markets are responding to that. The dollar is slipping through support and may well go much lower.

Gold ETFs – Yesterday saw purchases of 4.145 tonnes into the SPDR gold ETF but no change in the Gold Trust.  Their respective holdings are now at 834.396 tonnes and 197.82 tonnes. 

Since January 4th 2016, 231.186 tonnes of gold have been added to the SPDR gold ETF and to the Gold Trust.  Since January 6th 2017 21.13 tonnes have been added to the SPDR gold ETF and the Gold Trust.

 Julian D.W. Phillips – GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance 

 

3.85 tonne withdrawal from GLD has little gold pricing effect

 Gold Today –New York closed at $1,234.60 yesterday after closing at $1,228.80 on the 17th March. London opened at $1,231.70 today. 

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

         The $: € was weaker at $1.0793: €1 from $1.0765: €1 yesterday.

         The Dollar index was weaker at 100.06 from 100.16 yesterday. 

         The Yen was weaker at 112.86:$1 from yesterday’s 112.74 against the dollar. 

         The Yuan was stronger at 6.8968: $1, from 6.9051: $1, yesterday. 

         The Pound Sterling was weaker at $1.2380: £1 from yesterday’s $1.2419: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    3    21

     2017    3    20       2017    3    17

SHAU

SHAU

SHAU

/

276.75

275.49

/

276.93

275.78

$ equivalent 1oz @  $1: 6.8968

      $1: 6.9051

$1: 6.9068

  /

$1,246.60

$1,240.62

/

$1,247.41

$1,241.92

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 276.50 Yuan, which directly translates into $1,246.97. But allowing for the difference of gold being traded this equates to a price of $1,241.97. This more than $12.37 higher than the New York close and $10.27 higher than London.

The price differential between the three centers is narrowing again as China continues to dominate gold prices. Even a nearly 4 tonne sale from the SPDR gold ETF did not change U.S. prices. As you can see above, Shanghai’s gold prices are steady at higher levels uninfluenced by London or New York at the moment.

LBMA price setting:  The LBMA gold price was set today at $1,232.05 down from yesterday’s $1,233.00.  

The gold price in the euro was set at €1,139.94 after yesterday’s €1,146.34.

Ahead of the opening of New York the gold price was trading at $1,233.15 and in the euro at €1,141.07 At the same time, the silver price was trading at $17.43. 

Silver Today –Silver closed at $17.42 at New York’s close yesterday against $17.38 on the 17th March. Silver prices continue rising slowly in line with gold’s dollar prices.

Price Drivers

Turning back to the G-20 statement we note that the G-20 maintained its call for competitive devaluations and FX market instability to be avoided. While it goes against brazen devaluations for the sake of gaining competitive advantage, protectionism will alter trade balances, which will affect exchange rates. Behind such international plays, nations do attempt to keep their exchange rates low and lower. So while brazen currency wars are to be avoided, they will continue indirectly. Hence, the concerns surrounding trade with the G-20 statement calling for protectionism to be resisted not included in the statement

Markets are still expecting the enormous policy implementation of new tax rates and infrastructure spending. These are certain to have far more impact on global financial markets than any policy decisions President Trump has made to date. Likewise any implementation of Trade tariffs. These will ripple out and over precious metal markets. At this point ahead of these announcements we see them being positive for gold.

Gold ETFs – Yesterday saw sales of 3.849 tonnes from the SPDR gold ETF (GLD) but no change in the Gold Trust (IAU).  Their respective holdings are now at 830.251 tonnes and 197.82 tonnes. 

 Julian D.W. Phillips –  GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance 

Gold soars post-Fed. Dollar falls back

 Gold Today –New York closed at $1,220.00 on the 15th March after closing at $1,198.70 on the 14th March. London opened at $1,224.15 today. 

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

         The $: € was weaker at $1.0709: €1 from $1.0623: €1 yesterday.

         The Dollar index was weaker at 100.72 from 101.58 yesterday. 

         The Yen was stronger at 113.44:$1 from yesterday’s 114.65 against the dollar. 

         The Yuan was stronger at 6.8967: $1, from 6.9124: $1, yesterday. 

         The Pound Sterling was stronger at $1.2266: £1 from yesterday’s $1.2195: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    3    16

     2017    3    15       2017    3    14

SHAU

SHAU

SHAU

/

270.98

272.05

/

271.58

271.47

$ equivalent 1oz @  $1: 6.8967

      $1: 6.9124

$1: 6.9137

  /

$1,219.32

$1,223.90

/

$1,222.02

$1,221.29

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 275.50 Yuan, which directly translates into $1,242.48. But allowing for the difference of gold being traded this equates to a price of $1,237.48. This more than $17.48 higher than the New York close and $13.33 higher than London.

With arbitrage opportunities wide open between Shanghai and New York/London we see Shanghai pulling gold out of them. Dealers in London and New York ignored the decent tonnages being bought into the U.S. based gold ETFs recently and held prices down. We expect this to change in the days to come.

LBMA price setting:  The LBMA gold price was set today at $1,225.60 down from yesterday’s $1,202.25.  

The gold price in the euro was set at €1,142.64 after Friday’s €1,131.85.

Ahead of the opening of New York the gold price was trading at $1,227.15 and in the euro at €1,144.14 At the same time, the silver price was trading at $17.49. 

Silver Today –Silver closed at $17.31 at New York’s close yesterday against $16.88 on the 14th March.

 Price Drivers

As we said yesterday, “One of the dangers of getting carried away by the early days of a new President is that markets can run too far and ahead of the realities facing that President. This may well prove to be the case with the sell-off in gold of late…..” The Fed has not joined in that exuberance, instead of just raising interest rates by 0.25% but making dovish statements that while a total of 3 rate hikes can be expected this year, the Fed will maintain its accommodative stance. This disappointed many markets sending equity markets higher [because the fear of much higher rates in the future has dissipated] and the dollar lower against all currencies. Gold benefitted and traded higher, but the digestion of the Fed’s speech leaves more gold price rises to come.

At the same time, President Trump announced major spending cuts but a major expansion of defense spending. We still await his announcements on infrastructure spending which will bring growth but at the expense of inflation and deficit spending. At the moment inflation is reported by government agencies at being close to 2%. This leaves rates negative.

What is expected around the autumn is a signal by the Fed that it will slow its re-investment policies in Treasuries as a start to improving the Fed’s Balance Sheet. This could take 10-year Treasuries to 3.10%. If they don’t it is expected 10-year Treasuries will end the year around 2.6%. We expect that by that time inflation will be higher than Treasury 10-year yields, which is positive for U.S. gold buying.

Over in Europe, the fear of a popularism victory in Holland has gone, as the previous government looks as though it will keep ruling there. The voter turnout was huge leading many to believe that both in France and Germany similar election results will be achieved. We would be cautious about that conclusion. We don’t expect France to be that liberal. But we don’t see markets discounting a Le Pen victory or a Merkel defeat. Nevertheless, those ‘winds of change’ continue to blow!

Gold ETFs – Yesterday saw purchases of 4.442 tonnes into the SPDR gold ETF but no change in the holdings of the Gold Trust.  Their respective holdings are now at 839.431 tonnes and 197.22 tonnes. 

Julian D.W. Phillips – GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance 

Gold moves back above $1,200 despite positive jobs report

Gold Today –New York closed at $1,201.90 on the 9th March after closing at $1,208.70 on the 8th March. London opened at $1,197.00 today.

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

         The $: € was weaker at $1.0611: €1 from $1.0535: €1 yesterday.

         The Dollar index was stronger at 101.82 from 102.17 yesterday. 

         The Yen was weaker at 115.40:$1 from yesterday’s 114.50 against the dollar. 

         The Yuan was weaker at 6.9160: $1, from 6.9113: $1, yesterday. 

         The Pound Sterling was barely changed at $1.2166: £1 from yesterday’s $1.2164: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    3    10

     2017    3    9

      2017    2    8

SHAU

SHAU

SHAU

/

272.74

274.14

/

271.92

274.09

$ equivalent 1oz @  $1: 6.9160

      $1: 6.9113

$1: 6.9049

  /

$1,227.43

$1,242.23

/

$1,223.74

$1,242.18

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 270.9 Yuan once again, which directly translates into $1,218.32. But allowing for the difference of gold being traded this equates to a price of $1,213.32. This was $11.42 higher than the New York close and $16.32 higher than London.

The demand for gold in Shanghai at the moment is not sufficient to lift its own prices let alone those of New York or London, as we see above. This is in the face of a weakening Yuan. The head of the People’s Bank of China stated that the Yuan exchange rate will remain stable going forward. We are always wary of central bank statements on exchange rates, because history shows that such statements are usually way off the mark. We can only summize that the PBoC is going to filter purchases of U.S. dollars for investment and maintain such capital / Exchange Controls to ensure strategic foreign purchases that favour China overall are permitted.  It is only in this way that the exchange rate of the Yuan can be managed. But will Chinese gold investors believe this?

The investments of Chinese capital that don’t meet these criteria are unlikely to be permitted. We believe that gold purchases from overseas are deemed of strategic benefit to China.

This will not prevent the expansion of Yuan usage in international trade from rising.

LBMA price setting:  The LBMA gold price was set today at $1,196.55 down from yesterday’s $1,204.60.  

The gold price in the euro was set lower at €1,127.76 after yesterday’s €1,140.61.

Ahead of the opening of New York the gold price was trading at $1,204.40 and in the euro at €1,130.79 At the same time, the silver price was trading at $17.07. 

Silver Today –Silver closed at $16.97 at New York’s close yesterday against $17.24 on the 7th March.

Price Drivers

The latest US Jobs report came out at a 235,000 increase in jobs following a 238,000 rise in January that was more than previously estimated, the best back-to-back rise since July. The unemployment rate fell to 4.7%, and wages grew 2.8% from February 2016. This is positive for U.S. future growth.  

It seems that once the numbers were out, the gold price recovered havig fallen overnight to below the pschologically importants $1,200 level, as it was no longer an awaited item. Rather like the expectation of an oil strike raised share values of a producer, but confirmation of expectations let the price fall. Likewise with the gold price!

In line with that, the dollar weakened too.

As you can see the gold price is falling faster in the euro than in the dollar at the moment as the euro strengthened. While Mario Draghi said little of significance yesterday he indicated that the easing policy would continue for a long time still.

Soft Chinese demand [waiting for the dollar to react?] contributed to this but so was dealer’s ‘marking down’ of the gold price. As you can see below the volumes of sales out of the U.S. based gold ETFs was not large enough to move prices, but, as we said yesterday in such a wary, buyer-sidelined market, it takes small volumes to move prices. So, it looks like we will see gold prices consolidate until the Fed speaks next week.

To get a feel for the market, we say that if a substantial buyer came in prices would move higher – disproportionately higher. The market is in a delicate position right now even after the jobs report, ahead of the Fed’s statement and probable rate rise next week.

The question now is, does this report imply four rate hikes, not just two. This was why the gold price was being marked down so much.  But Oriental physical gold demand is strong and likely to get stronger as we move up to April, the start of this year’s wedding season in India.

Gold ETFs – Yesterday saw sales of 2.665 tonnes from the SPDR gold ETF and 0.3 of a tonne from the Gold Trust.  Their respective holdings are now at 834.101 tonnes and 197.22 tonnes. 

 

Since January 4th 2016, 230.291 tonnes of gold have been added to the SPDR gold ETF and to the Gold Trust.  Since January 6th 2017 20.21 tonnes have been added to the SPDR gold ETF and the Gold Trust.

 Julian D.W. Phillips – GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance 

Structural Change in Global Gold Markets as Price Touches $1,260

 

 Gold Today –New York closed at $1,248.80 on the 23rd February after closing at $1,238.10 on the 22nd February. London opened at $1,254.00 today.

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

         The $: € was weaker at $1.0589: €1 from $1.0545: €1 on yesterday.

         The Dollar index was weaker at 100.95 from 101.36 on yesterday. 

         The Yen was stronger at 112.85:$1 from yesterday’s 113.20 against the dollar. 

         The Yuan was stronger at 6.8717: $1, from 6.8786: $1, yesterday. 

         The Pound Sterling was stronger at $1.2553: £1 from yesterday’s $1.2477: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    2    24

     2017    2    23

      2017    2    22

SHAU

SHAU

SHAU

/

276.08

275.89

/

275.93

275.8

$ equivalent 1oz @  $1: 6.8717

      $1: 6.8786

$1: 6.8818

  /

$1,248.37

$1,246.93

/

$1,247.69

$1,246.53

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 279.50 Yuan, which directly translates into $1,265.10. But allowing for the difference in quality of gold being traded this equates to a price of around $1,260.10. This is $8 higher than the New York close and $7 higher than London.

Bearing in mind that the prices of the 23rd [yesterday] above are the prices ahead of London’s opening and well ahead of New York’s opening. As you can see both London and New York were dragged higher by Shanghai. Looking at Shanghai’s closing prices today [not in the table as they have not yet been officially released], we are looking at prices over $1,260. If London and New York continue to follow Shanghai, which we believe will happen, then both London and New York will see good rises today.

LBMA price setting:  The LBMA gold price was set today at $1,255.35 up from yesterday’s $1,237.35.  

The gold price in the euro was set higher at €1,185.02 after yesterday’s €1,172.40.

Ahead of the opening of New York the gold price was trading at $1,257 80 and in the euro at €1,186.16.  At the same time, the silver price was trading at $18.30. 

Silver Today –Silver closed at $18.18 at New York’s close yesterday against $18.04 on the 22nd   February.

Price Drivers

The media will continue to attribute rises in the gold price to events in the U.S. with an occasional nod towards gold ETF buying. But today we see there was no purchases into the U.S. based gold ETFs. The dollar weakened against most currencies, but even in the euro against which the dollar is most often measured, the gold price rose almost the same as it did in the dollar. So, today is a day when the gold price has again risen against all currencies, with Shanghai leading the way! This pattern, now that the slowdown in Chinese demand due to the Lunar New Year is out of the way, seems to be taking hold of the gold markets.

It is a structural change in the global gold markets and appears to us that effective arbitraging [dealing between two markets] has become efficient. Banks that are permitted to take gold into China must be active in doing this but the main player has to be the ICBC which is a member of the price setting committee and a ‘market maker’ in London with their vaults, in total, accommodating 3,500 tonnes of gold for clients and itself.

Gold ETFs – Yesterday saw no sales or purchases from or into the SPDR gold ETF or the Gold Trust.  Their respective holdings are now at 841.169 tonnes and 201.82 tonnes. 

Julian D.W. Phillips 

 GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance 

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  Global Gold Price (1 ounce)
  Today Yesterday
Franc Sf1,263.52 Sf1,250.94
US $1,257.80 $1,240.15
EU €1,186.16 €1,174.00
India Rs.83,818.53 Rs. 82,866.82

 

Gold price measuring the value of currencies – not vice versa

Gold Today –New York closed at $1,236.30 on the 21st February after closing at $1,239.00 on the 20th February. London opened at $1,235.00 today.

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

         The $: € was stronger at $1.0505: €1 from $1.0558: €1 on yesterday.

         The Dollar index was stronger at 101.59 from 101.37 on yesterday. 

         The Yen was stronger at 113.32:$1 from yesterday’s 113.56 against the dollar. 

         The Yuan was stronger at 6.8818: $1, from 6.8866: $1, yesterday. 

         The Pound Sterling was stronger at $1.2491: £1 from yesterday’s $1.2423: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    2    22

     2017    2    21

      2017    2    20

SHAU

SHAU

SHAU

/

275.57

274.98

/

275.19

275.04

$ equivalent 1oz @  $1: 6.8818

      $1: 6.8866

$1: 6.8783

  /

$1,244.62

$1,243.45

/

$1,242.90

$1,243.72

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 275.8 Yuan, which directly translates into $1,246.53. But allowing for the difference of gold being traded this equates to a price of $1,241.53. This is $5 higher than New York and $1 higher than London. We watch to see if London and New York continue to follow Shanghai or not.

LBMA price setting:  The LBMA gold price was set today at $1,237.50 up from yesterday’s $1,228.70.  

The gold price in the euro was set higher at €1,177.79 after yesterday’s €1,166.30.

Ahead of the opening of New York the gold price was trading at $1,237.70 and in the euro at €1,177.51.  At the same time, the silver price was trading at $18.00. 

Silver Today –Silver closed at $17.98 at New York’s close yesterday against $18.03 on the 20th February.

Price Drivers

With the gold price still struggling to break through $1,240 – $1,250 we expect the price to keep pushing higher against the dollar. It is rising well in all other currencies.

We all watch the gold price in dollars to see whether it is rising or falling. This way of thinking is deeply embedded, going back to the time when the dollar was entrenched as the world’s most important currency.

This has extended to each of us, looking first at our expectations of which way the gold price is going in the dollar, then our view of the currency under which we live, against the dollar. Our objective is to see how gold will perform in our currency [if it is not the dollar]. The separation of our currency against the dollar and the dollar against gold is because the dollar, right now, is the global currency. But this is waning. Indeed, the gold price in the dollar is slowly becoming a measure of the dollar against gold, not the other way around.

Over time as we move into a multi-currency system and when the biggest physical gold market, China, dominates the gold price [which is happening right now], we will have to shift our thinking back to measuring supply and demand for gold.

How will we see this measure the gold price? We have reported the alignment of the world’s three gold markets, London, New York and Shanghai as Shanghai gains in prominence. We are seeing far smaller impacts of speculative action, that dominates New York. We are seeing London’s bullion banks ensure they are as prominent in the Chinese market as they are in London. China has made speculative trading much more expensive than New York, and since then we see more stability in the gold price. This tells us the effect of the Chinese gold market is becoming easily visible.

In turn we see the gold price more effectively measuring the value of currencies, as it has over several millenniums. Today’s action shows the gold price rising in all currencies, but more in the euro than in the dollar. In other ‘soft’ currencies the gold price is an excellent hedge against a weakening currency and more so over the long term. Over the very long term the gold price outperforms most other investments. For instance in the early ‘70’s a South African investor would have bought a Krugerrand for R300, it is now priced at around R16,200.

Gold ETFs – Yesterday saw no sales or purchases from or into the SPDR gold ETF or the Gold Trust.  Their respective holdings are now at 841.169 tonnes and 201.38 tonnes. 

 Julian D.W. Phillips 

 GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance 

Gold price consolidating again

 Gold Today –New York closed at $1,235.60 on the 16th February after closing at $1,239.30 on the 17th February. London opened at $1,234.00 today.

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

         The $: € was stronger at $1.0619: €1 from $1.0645: €1 on Friday.

         The Dollar index was slightly stronger at 100.87 from 100.69 on Friday. 

         The Yen was weaker at 113.17:$1 from Friday’s 112.85 against the dollar. 

         The Yuan was weaker at 6.8783: $1, from 6.8654: $1, Friday. 

         The Pound Sterling was stronger at $1.2462: £1 from Friday’s $1.2407: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    2    20

     2017    2    17

      2017    2    16

SHAU

SHAU

SHAU

/

275.61

275.34

/

275.89

274.79

$ equivalent 1oz @  $1: 6.8783

      $1: 6.8654

$1: 6.8603

  /

$1,248.64

$1,248.35

/

$1,249.91

$1,245.85

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.]

 Shanghai was trading at 275.30 Yuan towards the close today. This equates to $1,244.90, but allowing for the different quality of gold being traded [0.9999 fineness] it stands at $1,239.90. Shanghai is in line with both London and New York.

If we look back to the time when the SGE started to make speculation more expensive, earlier this year, we see that the price differentials between London, New York and Shanghai have narrowed and when Shanghai is not leading the way the three markets remain in line. This implies that the efforts of arbitrageurs appear to be succeeding in smoothing prices out. This makes the global gold price a reliable one with speculators losing their power to shift the gold price heavily without additional physical gold action.

Consequently, we expect in the future to see fewer violent swings in the gold price between markets. We do see that gold prices are reflecting exchange rate moves, which is what gold should do.

LBMA price setting:  The LBMA gold price was set today at $1,235.35 down from Friday’s $1,241.40.  

The gold price in the euro was set higher at €1,163.12 after Friday’s €1,166.29.

Ahead of the opening of New York the gold price was trading at $1,236.35 and in the euro at €1,163.90.  At the same time, the silver price was trading at $18.02. 

Silver Today –Silver closed at $18.00 at New York’s close Friday against $18.08 on the 16th February

Price Drivers

The week has started in a quiet mood with no startling gold related news moving prices. Sales from the U.S. based gold ETFs have held back prices below $1,240, but we don’t see them as precipitating a fall in the gold price today. We expect to see more consolidation today.

The august Alan Greenspan has said, “The European Central Bank (ECB) has greater problems than the Federal Reserve. The asset side of the ECB’s balance sheet is larger than ever before, having grown steadily since Mario Draghi said he would do whatever it took to preserve the euro.  I have grave concerns about the future of the Euro itself.  Northern Europe has, in effect, been funding the deficits of the South; that cannot continue indefinitely. The Eurozone is not working.” Greenspan said Brexit is almost certainly set to trigger a collapse of the ECB despite the UK not having signed up to take on the currency.

Alan Greenspan says that investors are back to safe havens including precious metals because there is no trust in the banking system. And he said countries cannot continue to borrow in the way that they have been signaling that quantitative easing is not working. He added: “I view gold as the primary global currency.

Alan Greenspan is not selling anything, is not given to extreme statements, but is an ex-Chairman of the U.S. Federal Reserve.

Central banks in all nations have to control their national currency. The more currencies face loss of confidence the more control over their own citizen’s money is needed. Within their own jurisdiction central banks almost cannot be held to account. That’s why Japan can sustain its horrendous debt, most of it is owned by their own citizens.

Outside it they are in danger [as we see in Greece today].  So, when Alan Greenspan himself makes the above statements we should be looking to gold, particularly those who have to live with the euro, before they can’t!

Gold ETFs – Friday saw sales of 2.37 tonnes from the holdings of the SPDR gold ETF and sales of 0.65 of a tonne from the Gold Trust.  Their respective holdings are now at 841.169 tonnes and 201.38 tonnes. 

Since January 4th 2016, 241.939 tonnes of gold have been added to the SPDR gold ETF and to the Gold Trust.  Since January 6th 2017 31.858 tonnes have been added to the SPDR gold ETF and the Gold Trust.

 Julian D.W. Phillips 

 GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance 

Gold building a base above $1,240

 Gold Today –New York closed at $1,239.30 on the 16th February after closing at $1,232.60 on the 15th February. London opened at $1,240.00 today.

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

         The $: € was weaker at $1.0645: €1 from $1.0627: €1 on yesterday.

         The Dollar index was weaker at 100.69 from 100.80 on yesterday. 

         The Yen was stronger at 112.85:$1 from yesterday’s 113.70 against the dollar. 

         The Yuan was weaker at 6.8654: $1, from 6.8603: $1, yesterday. 

         The Pound Sterling was weaker at $1.2407: £1 from yesterday’s $1.2494: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    2    17

     2017    2    16

      2017    2    15

SHAU

SHAU

SHAU

/

275.34

273.26

/

274.79

273.34

$ equivalent 1oz @  $1: 6.8654

      $1: 6.8603

$1: 6.8694

  /

$1,248.35

$1,237.27

/

$1,245.85

$1,237.64

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.]

 Shanghai was trading at 275.90 Yuan towards the close today. This equates to $1,249.96, but allowing for the different quality of gold being traded [.9999 fineness] it stands at $1,244.96. Shanghai continues to lead the way over New York by $5 and $3 over London.

With Capital Controls over Yuan outflows reducing turnover volumes in its currency we are watching the classic central bank battles against moves in a currency. We have yet to see a central bank win the battle over controlling an exchange rate.

Such controls are defeating the internationalization of the Yuan. We expect them to drop the battle at some point in time and for the Yuan to lurch lower then. The Chinese gold investor, we think, is aware of such pressures and is happy to own gold rather than Yuan.

We are of the opinion that despite the above the government of China will continue to allow the outflow of Yuan to pay for gold imports, while controlling other outflows.

LBMA price setting:  The LBMA gold price was set today at $1,241.40 up from yesterday’s $1,236.75.  The gold price in the euro was set higher at €1,166.29 after yesterday’s €1,163.67.

Ahead of the opening of New York the gold price was trading at $1,243.10 and in the euro at €1,166.57.  At the same time, the silver price was trading at $18.06. 

Silver Today –Silver closed at $18.08 at New York’s close yesterday against $17.97 on the 15th February. 

Price Drivers

With even Blackrock recommending gold in portfolios we expect more U.S. buying to follow in gold. Today it is building a base over $1,240 and looking as though it wants to run.

One of the most difficult features of financial markets today is the demand for short term performance even within monthly time slots.

Gold has always been for the long term outperforming all other investments over that time, but in the world today it’s the fund manager that meets trading demands that is deemed the best manager. Indeed, we have always seen that the best portfolio manager is measured over the medium to long term and is not a trader. Warren Buffett backs that and proves the point.

We have absolutely no doubt that if you measure gold from today over the next five years or longer, gold will outperform all other investments. Look back over the past decade and we prove our point.

Having said that we expect to see gold from today to the end of the year likely outperform all other investments. Even Alan Greenspan has recently stated that gold is the ultimate insurance policy.

This seems more than appropriate in a world that is moving from dollar hegemony to a multi-currency monetary system as ‘popularism’ is spreading across the developed world. With French and German elections pointing towards change and an E.U. that Greenspan says is ‘not working’ gold seems to be a relatively safe place to weather coming storms.

Gold ETFs – Yesterday we no change in the holdings of the SPDR gold ETF or the Gold Trust.  Their respective holdings are now at 843.539 tonnes and 202.03 tonnes. 

 Julian D.W. Phillips 

 GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance 

Gold stronger today in all currencies

 Gold Today –New York closed at $1,232.60 on the 15th February after closing at $1,227.40 on the 14th February. London opened at $1,238.00 today.

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

         The $: € was stronger at $1.0627: €1 from $1.0572: €1 on yesterday.

         The Dollar index was weaker at 100.80 from 101.29 on yesterday. 

         The Yen was stronger at 113.70:$1 from yesterday’s 114.47 against the dollar. 

         The Yuan was stronger at 6.8603: $1, from 6.8694: $1, yesterday. 

         The Pound Sterling was stronger at $1.2494: £1 from yesterday’s $1.2457: £1.

Yuan Gold Fix

Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    2    16

     2017    2    15

      2017    2    14

SHAU

SHAU

SHAU

/

273.26

273.51

/

273.34

274.10

$ equivalent 1oz @  $1: 6.8603

      $1: 6.8694

$1: 6.8681

  /

$1,237.27

$1,238.64

/

$1,237.64

$1,241.31

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.]

 Shanghai was trading at 274.40 Yuan towards the close today. This equates to $1,239.08, but allowing for the different quality of gold being traded [.9999 fineness]. As you can see Shanghai is leading the way over London and New York but only slightly now.

Thus  Shanghai is once again leading the way higher and pulling other markets with it. But the differential between the global gold markets is only slight now.

In 2016 China consumed close to 2,000 tonnes of gold, mostly drawing it off from the west.

LBMA price setting:  The LBMA gold price was set today at $1,236.75 up from yesterday’s $1,225.15.  

The gold price in the euro was set higher at €1,163.67 after yesterday’s €1,161.22.

Ahead of the opening of New York the gold price was trading at $1,237.40 and in the euro at €1,164.01.  At the same time, the silver price was trading at $18.06. 

Silver Today –Silver closed at $17.97 at New York’s close yesterday against $17.94 on the 14th February

Price Drivers

The dollar rises seen in the last few days, are largely due to speculative, emotional, positioning punting a bullish picture for the dollar. Yes, the superficial view of the factors pointing to a strong dollar, such as higher interest rate differentials coming, more potential dynamic growth and potential cash inflows from repatriated funds look positive for the dollar. But we cannot ignore the desire of the Fed and Treasury to see a weaker dollar for the sake of U.S. international trade.

Yesterday we said, “We are watching the dollar carefully to see if it does jump or be contained at these or lower levels. This will point the way forward in the U.S. to its gold price.” And the day after it slipped again. It is at a critical juncture where it can go either way in the near term.

What does appear to be happening is that uncertainties across the world are worrying investors and they are being seen to favour gold investments. Here we are talking about directly held gold bullion under the control of the investor, not ‘electronic gold’. This demand is growing, as reported by our friends in Swiss refineries, etc, who continue to be going flat out refining gold into metric formats for trading in markets in Switzerland and eastwards. It is most enlightening to hear that such Swiss gold people are not at all happy to receive dollars in payment, only euros or Swiss Francs. This tells quite a story!

Gold ETFs – Yesterday we purchases of 2.667 tonnes into the SPDR gold ETF and o.74 of a tonne into the Gold Trust.  Their respective holdings are now at 843.539 tonnes and 202.03 tonnes.  We focus only on these two ETFs as they represent U.S. gold demand well, but the total increase in global ETFs is around 51 tonnes in the last 10 days.

Since January 4th 2016, 244.959 tonnes of gold have been added to the SPDR gold ETF and to the Gold Trust.  Since January 6th 2017 34.878 tonnes have been added to the SPDR gold ETF and the Gold Trust.

Julian D.W. Phillips 

 GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance