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 

GLD investors still buying big but directionless gold market

 Gold Today –New York closed at $1,225.90 on the 13th February after closing at $1,234.00 on the 10th February. London opened at $1,227.50 today.

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

         The $: € was slightly stronger at $1.0623: €1 from $1.0653: €1 on yesterday.

         The Dollar index was slightly stronger at 100.78 from 100.67 on yesterday. 

         The Yen was slightly stronger at 113.48:$1 from yesterday’s 113.61 against the dollar. 

         The Yuan was stronger at 6.8681: $1, from 6.8804: $1, yesterday. 

         The Pound Sterling was slightly stronger at $1.2529: £1 from yesterday’s $1.2520: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    2    14

     2017    2    13

      2017    2    10

SHAU

SHAU

SHAU

/

274.49

273.20

/

274.26

273.14

$ equivalent 1oz @  $1: 6.8681

      $1: 6.8804

$1: 6.8862

  /

$1,240.86

$1,233.99

/

$1,239.82

$1,233.71

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 closed today.

LBMA price setting:  The LBMA gold price was set today at $1,229.65 up from yesterday’s $1,229.40.  

The gold price in the euro was set higher at €1,157.43 after yesterday’s €1,155.55.

Ahead of the opening of New York the gold price was trading at $1,229.40 and in the euro at €1,156.48.  At the same time, the silver price was trading at $17.94. 

Silver Today –Silver closed at $17.82 at New York’s close yesterday against $17.94 on the 10th February.   You will note its rise against gold is holding.

Price Drivers

Today sees Shanghai closed, removing the Shanghai influence on the gold price. In the Chinese vacuum, western gold markets are using the opportunity to pull gold prices lower on a day when the dollar is slightly stronger but not sufficient to make the gold price fall. Hence, we see today as a day when we could see bargain hunters.

Why are we so firm on this? As you can see below there were substantial physical gold purchases into the SPDR gold ETF and smaller ones into the Gold Trust. This should have moved prices higher. But with Shanghai closed, dealers clearly feel that selling may come in.

What seems to be a market driver is that if investors in the SPDR [GLD] gold ETF come in again as they did yesterday, dealers will be caught wrong-footed and be forced to lift gold prices quite a bit higher for when eastern markets return.

The gold market today is directionless. It will change when far eastern demand comes back, but today we expect no dramatic moves, but may well see physical demand appear, but this will only show in prices later today or tomorrow.

Even in the U.S. where the mood is more positive than elsewhere we see inflation needing to pick up more before the Fed contemplates higher interest rates and as we said before, the tax and stimuli policies need to be clearer before the Fed acts.

Gold ETFs – Yesterday we saw purchases of 8.295 into the SPDR gold ETF and of 0.39 into the Gold Trust.  Their respective holdings are now at 840.872 tonnes and 201.29 tonnes. 

Since January 4th 2016, 241.552 tonnes of gold have been added to the SPDR gold ETF and to the Gold Trust.  Since January 6th 2017 31.471 tonnes have been added to the SPDR gold ETF and the Gold Trust.

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

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 

Banks and Dealers positioned for higher Gold price. GLD continues to add gold

Gold Today –New York closed at $1,234.70 on the 6th February after closing at $1,219.00 on the 5th February. London opened at $1,230.00 today.

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

         The $: € was stronger at $1.0666: €1 from $1.0750: €1 on yesterday.

         The Dollar index was stronger at 100.62 from 99.96 on yesterday. 

         The Yen was stronger at 112.19:$1 from yesterday’s 112.62 against the dollar. 

         The Yuan was weaker at 6.8790: $1, from 6.8625: $1, yesterday. 

         The Pound Sterling was weaker at $1.2363: £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    07

     2017    2    06

      2017    2    03

SHAU

SHAU

SHAU

/

272.00

269.93

/

271.92

269.52

$ equivalent 1oz @  $1: 6.8790

      $1: 6.8625

$1: 6.8632

  /

$1,232.81

$1,223.30

/

$1,232.45

$1,221.44

Please note that the Shanghai Fixes are for 1 gm of gold. From the Middle Eat 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 in gold at 274.3 Yuan during today’s session before London opened. This equates to $1,240.25. Shanghai now has momentum and was trading just 55 cents above New York’s close.

LBMA price setting:  The LBMA gold price was set today at $1,231.00 up from yesterday’s $1,221.85.  

The gold price in the euro was set higher at €1,152.89 after yesterday’s €1,137.45.

Ahead of the opening of New York the gold price was trading at $1,230.75 and in the euro at €1,152.77.  At the same time, the silver price was trading at $17.64. 

Silver Today –Silver closed at $17.73 at New York’s close Friday against $17.46 on the 3rd February. 

Price Drivers

What is now very clear is that if Marine le Pen and her party are elected, France will likely leave the E.U. Yesterday saw a plan to leave the E.U. produced by her party. It could involve a dual currency. Some have said that a dual currency never works. On the contrary dual currencies have pulled several nations out of a hole, including the U.K. in the early seventies. One currency for commercial transactions and another for capital. The ‘Dollar Premium’ used by the U.K. was structured not only to prevent capital leaving but gave incentives to capital coming in. It worked so well that after the crisis then, there was a return to a single currency and no capital exited thereafter that could not be managed. At Gold Forecaster we wrote at length that this was an option for Greece years ago. Properly handled such dual currencies are ideal in the case of a nation like France that faces the risk of a capital exit and the return of the French Franc. It must be accompanied by Capital/Exchange Controls at the same time during the period of transition.

In response to the promise of a return to the French Franc Mario Draghi had a sense of humour failure and stated that the euro was irreversible.  So the issue of sovereignty both in the E.U. and in the member states is on the table! Even Britain may lose a member nation, Scotland.

Such an introspective national posturing is very good for gold as it highlights the weaknesses inherent in national currencies, producing falling confidence in them. Hence the need for a non-national asset that is acceptable internationally, even between enemies and those uncreditworthy nations. Gold has always filled that role, lasting throughout history. National currencies have not.

But as we said yesterday, “The moment such talk hits the airwaves, the moment we hear that will mean a collapsing euro. We cannot buy that at all”. The strong members remaining will re-group behind the euro.

Gold ETFs – Yesterday we saw 4.418 tonnes of gold bought into the SPDR gold ETF (GLD) but no change was seen in the holdings of the Gold Trust (IAU).  Their respective holdings are now at 818.653 tonnes and 199.91 tonnes. 

Yesterday’s large purchase of gold into the SPDR gold ETF added to the ongoing steady buying pattern that began last week.

As we said yesterday, “The buying is persistent enough for the bullion banks to keep their books ‘long’ of gold. The potential for any shortage of open market stocks is great now, as the mood towards gold goes positive. So dealers and banks have re-positioned themselves for higher prices.”

Since January 4th 2016, 217.953 tonnes of gold has been added to the SPDR gold ETF and to the Gold Trust. 
 Julian D.W. Phillips:  GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance 

Gold firm – seeing good support as GLD adds more gold

Gold Today –New York closed at $1,219.00 on the 3rd February after closing at $1,215.30 on the 2nd February. London opened at $1,223.20 today.

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

         The $: € was slightly stronger at $1.0750: €1 from $1.0758: €1 on Friday.

         The Dollar index was getting stronger at 99.96 from 99.88 on Friday. 

         The Yen was stronger at 112.62:$1 from Friday’s 113.12 against the dollar. 

         The Yuan was stronger at 6.8625: $1, from 6.8632: $1, Friday. 

         The Pound Sterling was weaker at $1.2457: £1 from Friday’s $1.2524: £1.

 Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    2    06

     2017    2    03

      2017    1    31

SHAU

SHAU

SHAU

/

269.93

/

/

269.52

/

$ equivalent 1oz @  $1: 6.8625

      $1: 6.8632

$1: 6.8772

  /

$1,223.30

/

/

$1,221.44

/

Please note that the Shanghai Fixes are for 1 gm of gold. From the Middle Eat 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 in gold at Yuan 269.85/gramme during today’s session before London opened. This equates to $1,223.06. For the first time in the last month all global gold markets appear in line. The reality is that Shanghai is lower due to the higher quality of gold it prices at $1,218.06. Therefore New York and London are higher than Shanghai. It’s the first time we have seen this, this year.

We need to make allowances for the fact that the Lunar New Year holiday only finished last Thursday. It’s still gaining trading momentum.

LBMA price setting:  The LBMA gold price was set today at $1,221.85 down from Friday’s $1,213.05.  

The gold price in the euro was set higher at €1,137.45 after Friday’s €1,129.78.

Ahead of the opening of New York the gold price was trading at $1,226.55 and in the euro at €1,141.83.  At the same time, the silver price was trading at $17.62. 

Silver Today –Silver closed at $17.46 at New York’s close Friday against $17.47 on the 2nd February. 

Price Drivers

With Shanghai still gathering cruising speed, London and New York are looking firm. The gains of Friday are still holding as President Trump continues to stir the pot on all fronts. But the currency front looks quiet at the moment. The dollar index has fallen through support and looks like we will see weakness, a factor favoring gold.

The market today looks as though it has built a base above support just above $1,200 and is set to rise. Continued U.S. ETF physical buying points to a palpable change to the positive, in the U.S. and London gold markets.

Remarkably we hear the German Finance Minister informing the world that the euro is too weak to benefit Germany. Is this a misquote? Was he serious? Nothing has helped Germany more since the euro was invented than that weak currency. By tying weak economies into a single currency in Europe, Germany has managed to drain capital and skills to itself because of its robust exports and strong economy. If the euro had not been weak and Germany retained the Deutschemark, it would have priced German goods out of the market long ago!

What is becoming clear to all is that Marine le Pen in France may well do a Trump in the coming elections. If she takes the French Presidency she will have a referendum to leave the E.U. And the media there is doing what the media did in the U.S. and persistently talked down that eventuality.

It is also clear that Italy is facing a crisis that brings it into the ‘want to exit’ the E.U., making a ‘Europe Unie’ a dubious concept. We hear many reports now on how Italy may well head to the exit too.

The moment such talk hits the airwaves, the moment we hear that will mean a collapsing euro. We cannot buy that at all

But with the weakening dollar, gold is doing well. But please note it is not just rising against the dollar, but against all currencies.

Gold ETFs – On Friday we saw 3.287 tonnes of gold bought into the SPDR gold ETF (GLD) but no change was seen in the holdings of the Gold Trust (IAU).  Their respective holdings are now at 814.505 tonnes and 199.91 tonnes. 

We are now seeing a steady pattern of gold buying into the U.S. based gold ETFs. In turn, this is pulling London up as the gold for these ETFs are sourced in London. We believe the London banks will not delay in buying as this could cause them to lose out as prices rise.

The buying is persistent enough for the bullion banks to keep their books ‘long’ of gold. The potential for any shortage of open market stocks is great now, as the mood towards gold goes positive. So dealers and banks have re-positioned themselves for higher prices.

Since January 4th 2016, 213.535 tonnes of gold has been added to the SPDR gold ETF and to the Gold Trust. 

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

U.S. Gold ETF Buyers Back In Force

Gold Today –New York closed at $1,215.30 on the 30th January after closing at $1,190.90 on the 27th January. London opened at $1,213.50 today.

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

         The $: € was weaker at $1.0758: €1 from $1.0711: €1 on the 30th January.

         The Dollar index was weaker at 99.88 from 100.34 on the 30th January. 

         The Yen was slightly stronger at 113.12:$1 from the 30th January’s 113.66 against the dollar. 

         The Yuan was stronger at 6.8632: $1, from 6.8772: $1, on the 30th January. 

         The Pound Sterling was stronger at $1.2524: £1 from the 30th January’s $1.2502: £1.

 With Shanghai open today for the first time since last Thursday, we won’t have the two daily Fixes for today until tomorrow. Meanwhile, Shanghai was trading today at 269.80 towards the close today after their return from the big annual holiday. This equates to $1,222.71.  This leaves it just $2 higher than the close in New York.

LBMA price setting:  The LBMA gold price was set today at $1,213.05 down from yesterday’s $1,224.05.  

The gold price in the euro was set higher at €1,129.78 after Monday’s €1,119.85.

Ahead of the opening of New York the gold price was trading at $1,212.00 and in the euro at €1,128.39.  At the same time, the silver price was trading at $17.34. 

Silver Today –Silver closed at $17.47 at New York’s close yesterday against $17.15 on the 30th January. 

 Price Drivers

We have been away from our desk since Monday and clearly missed a positive change in tone in London’s gold market due to the significant return of investors into the U.S. based gold ETFs. The shares U.S. investors bought into the SPDR gold ETF translated into buying of physical gold in London Wednesday.

On COMEX yesterday there was a jump in the volume of call options bought enjoying the rise in the gold price.

Shanghai’s opening today brought no fireworks. The gold price there is roughly in line with New York and London, so we have yet to see Chinese demand come to life still. With seasonal gold buying there over, we expect to see commercial gold trading come to life before retail trading as it will take time before retail buying comes back With the gold price still above $1,200, there is little enthusiasm to hunt for bargains. We remain in consolidation mode today.

President Trump’s latest actions continue to dominate world news and both in the U.S. and the rest of the world looks through a mixture of horror, delight and amazement at his actions. We expect his presidency to be world changing, already bringing in uncertainty.

We have no doubt that his review of the Dodd-Frank act will be followed by him fulfilling election promises of lower taxes and infrastructure spending.

Gold ETFs – Since the 30th January we have seen 12.148 tonnes of gold bought into the SPDR gold ETF (GLD) and 1.01 tonnes of gold bought into the Gold Trust (IAU).  Their respective holdings are now at 811.218 tonnes and 199.91 tonnes. 

This is a large amount when we look at the influences on the gold price in the last two days. It also explains why the gold price broke higher in London’s morning yesterday to Fix at $1,224.05. The pull back in New York does not yet reflect this big purchase but should do so today.

Since January 4th 2016, 210.248 tonnes of gold has been added to the SPDR gold ETF and to the Gold Trust. 

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

Gold moves over $1,200 without Shanghai. Silver advances too.

Gold Today –New York closed at $1,190.90 on the 30th January after closing at $1,190.90 on the 27th January. London opened at $1,1201.00 today.

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

         The $: € was weaker at $1.0711: €1 from $1.0696: €1 yesterday.

         The Dollar index was weaker at 100.34 from 100.55 yesterday. 

         The Yen was slightly stronger at 113.66:$1 from yesterday’s 114.86 against the dollar. 

         The Yuan was unchanged at 6.8772: $1, from 6.8772: $1, yesterday. 

         The Pound Sterling was weaker at $1.2502: £1 from yesterday’s $1.2545: £1.

 Yuan Gold Fix

 Shanghai is closed today until Friday for the Lunar New Year celebrations.

LBMA price setting:  The LBMA gold price was set today at $1,198.80 up from yesterday’s $1,189.85.  

The gold price in the euro was set lower at €1,119.85 after yesterday’s €1,115.34.

Ahead of the opening of New York the gold price was trading at $1,197.75 and in the euro at €1,118.71.  At the same time, the silver price was trading at $17.18. 

Silver Today –Silver closed at $17.15 at New York’s close yesterday against $17.12 on the 27th January. 

Price Drivers

On Monday in New York, there were purchases of gold into the Gold Trust of 0.60 of a tonne, still not enough to affect the gold price, which continued to rise after President Trump announced his Executive Order on Immigrants. There was no change in the holdings of the SPDR gold ETF, so we see the rise in the gold price over $1,200 as a rise that could easily be turned back. But there are only two more days to do that as Chinese demand returns on Friday. China continues to enjoy its Lunar New Year. We expect gold’s price action to be subdued until they return.

The furore over the President’s executive order looks to outsiders as somewhat chaotic with markets reacting seemingly to the emotions stirred up and not to economic realities. What amazes outsiders is that he won the Presidency on the policies he is enacting now. Did they think he was lying just to get votes then back off his policies? What is for sure is that he will continue to walk this road, so we expect the current tone of his Presidency to continue to be combative and upset the establishment. At this point in time, we would think that his actions will be gold neutral. Only when he announces his fiscal policies do we see it touching the U.S. gold world.

Gold ETFs – Friday, in New York, there were no sales or purchases of gold from or into the SPDR gold ETF (GLD) but there was a purchase of 0.60 of a tonne into the Gold Trust (IAU), leaving their respective holdings at 799.070 tonnes and 198.90 tonnes. 

Since January 4th 2016, 197.09 tonnes of gold has been added to the SPDR gold ETF and to the Gold Trust. 

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

Indian and Chinese gold demand higher than major analysts report

Gold Today –New York closed at $1,189.10 on the 26th January after closing at $1,200.10 on the 25th January. London opened at $1,184.00 today.

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

         The $: € was stronger at $1.0696: €1 from $1.0732: €1 yesterday.

         The Dollar index was stronger at 100.50 from 100.11 yesterday. 

         The Yen was weaker at 114.99:$1 from yesterday’s 113.78 against the dollar. 

         The Yuan was weaker at 6.8772: $1, from 6.8766: $1, yesterday. 

         The Pound Sterling was weaker at $1.2563: £1 from yesterday’s $1.2635: £1.

 Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    1    27

     2017    1    25

      2017    1    24

SHAU

SHAU

SHAU

/

/

269.04

/

/

267.84

$ equivalent 1oz @  $1: 6.8772

      $1: 6.8755

$1: 6.8766

  /

/

$1,216.89

/

/

$1,211.46

Please note that the Shanghai Fixes are for 1 gm of gold. From the Middle Eat 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 closed today until next Friday for the Lunar New Year celebrations. Yesterday it traded between 268 and 266.80 but the Fixes have not been released today. This equates to $1,212.38 and dropping to $1,206.95 Which was in line with London then, before New York took it down further as Options were closed.

The dollar was stronger across the board, but only slightly against the Yuan.

Shanghai has pricing power over gold

Looking back over the last month, since Shanghai cut the size of contract to a maximum of 500 Kgs, making speculation very expensive, there is no doubt that Shanghai controlled global gold prices during that time. We can see no reason why this should not continue in the future, after Chinese demand from the global gold market returns next week.

LBMA price setting:  The LBMA gold price was set today at $1,184.20 down from yesterday’s $1,191.55.  

The gold price in the euro was set lower at €1,107.45 after yesterday’s €1,111.21.

Ahead of the opening of New York the gold price was trading at $1,185.45 and in the euro at €1,108.62.  At the same time, the silver price was trading at $16.77. 

Silver Today –Silver closed at $16.80 at New York’s close yesterday against $16.99 on the 25th January. 

Price Drivers

Yesterday in New York there were no further sales of gold from the U.S. based gold ETFs, but as we forecast, the price fell as options were closed out. We do not expect heavy ongoing sales in the U.S. or London, because the time to sell was yesterday and the day before, in the very short term.  This may open the door to speculators going short for the next week only.

World Gold Demand/Supply figures not complete

We are getting the impression that developed world gold markets are of the opinion that there is surplus of gold and that demand will weaken soon. We do respect the leading analytical agencies which are extremely competent.

However, their arms are tied behind their backs because they only look at retail remand in China and cannot gather enough accurate information on smuggled gold in India, which we believe is far larger than they estimate and growing rapidly. Indians fear disclosing gold purchases to government via banks because they don’t trust government or banks but in particular the bureaucrats that administer government policies. Hence Indian ‘official’ imports cannot be an accurate measure of Indian demand.

Chinese gold demand that ignores gold in the banking system is likewise an inadequate measure.

Indian Gold inaccessible

The WGC provided numbers on gold held in India at 24,000 tonnes excluding Temple owned gold, which we know is well over 2,000 tonnes. This gives us a sense of proportion on Indian respect for gold remaining unwilling to give the government either control of it or access to it. Global Central Bank held gold is over 34,000 tonnes. While government and the Indian banking system would love to command these assets, we can’t see any government surviving after any attempt to do so. The debacle over the 86% of cash in the country causing an economic crunch of greater proportions than any agency will admit, in itself, may cost the government its position.

Current Global Gold Demand

We spoke to our Swiss friends in the industry and they have confirmed demand has never been so high with refineries running 24 hour shift six days a week in December and now.  

They are exporting primarily to China and Indian buyers at full pelt.

With prices pulling back now, when the Chinese do return we see them jumping in to get these prices.

Gold ETFs – Yesterday, in New York, there were no sales or purchases of gold from or into the SPDR gold ETF or the Gold Trust, leaving their respective holdings at 799.070 tonnes and 198.75 tonnes. 

Since January 4th 2016, 196.94tonnes of gold has been added to the SPDR gold ETF and to the Gold Trust. 

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