Gold and the dollar: Plodding along

Gold Today –New York closed at $1,267.00 yesterday after closing at $1,267.00 yesterday. London opened at $1,267.00 today. 

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

         The $: € was weaker at $1.1222 after yesterday’s $1.1179: €1.

         The Dollar index was weaker at 97.17 after yesterday’s 97.40

         The Yen was weaker at 111.15 after yesterday’s 110.84:$1. 

         The Yuan was much stronger at 6.8062 after yesterday’s 6.8180: $1. 

         The Pound Sterling was stronger at $1.2855 after yesterday’s $1.2791: £1.

Yuan Gold Fix
Trade Date     Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    6    1

     2017    5    31

     2017    5    30

SHAU

SHAU

SHAU

 

 

279.65

On holiday

 

Trading at 279.0

278.9

On holiday

 

$ equivalent 1oz at 0.995 fineness

@    $1: 6.8062

       $1: 6.8180

       $1: 6.8615     

 

   

 

$1,270.75

On holiday

 

 

Trading at $1,266.76

$1,267.33

On holiday

 

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.]

 While the Yuan price of gold continues to dip a little and the Yuan continues to strengthen, Shanghai is now leading the gold price, in New York and London a little weaker, alongside a weaker dollar.

The pattern usually seen in London and New York is for the gold price to go in the opposite direction to the dollar. Because of Shanghai’s influence this pattern is being broken, at the moment.  But we do not read too much into this as the moves in the gold price are too small to be conclusive.

Shanghai was trading today at slightly less than a $1 below New York’s close and London’s opening.

Global currency and gold markets continue relatively calm, with the exception of the Yuan which continues to go much stronger as the People’s Bank of China intervenes in the market place.

Silver Today –Silver closed at $17.32 yesterday after $17.41 at New York’s close.

LBMA price setting:  The LBMA gold price was set this morning at $1,266.15 from yesterday’s $1,263.80.  The gold price in the euro was set at €1,128.58 after yesterday’s €1,127.08.

Ahead of the opening of New York the gold price was trading at $1,266.45 and in the euro at €1,128.64. At the same time, the silver price was trading at $17.14. 

Price Drivers

The dollar continues to weaken slightly and the gold price in the dollar to rise, as it is doing in all currencies except the Yuan. The Technical picture shows that it is above resistance but has not yet run as it would have done in the past. Instead it is showing a steady plod with higher lows and higher highs. As we have been pointing out in the Shanghai section above, the influence of Shanghai on the gold price is visible. Its slow plod higher, we see, as evidence of Chinese price dominance at the moment.

If this is correct, we expect the steady plodding of the gold price to continue without those steep spikes much higher or lower. Instead, we expect to see the gold price show lower volatility going forward but a solid direction to be confirmed by such price action.

Stronger than expected U.S. jobs figures released today brought gold and silver prices down a few notches.

Gold ETFs – Yesterday, saw no sales or purchases of gold to or from the SPDR gold ETF. The internet page of the Gold Trust was a wrong page, so we cannot report on yesterday’s activity in that ETF. Their holdings are now at 847.452 tonnes and we presume, at 202.97 tonnes respectively.

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

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Is silver leading the way forward for gold?

Gold Today –New York closed at $1,267.00 yesterday after closing at $1,256.10 yesterday. London opened at $1,263.00 today. 

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

         The $: € was weaker at $1.1179 after yesterday’s $1.1157: €1.

         The Dollar index was weaker at 97.40 after yesterday’s 97.50

         The Yen was slightly stronger at 110.84 after yesterday’s 111.07:$1. 

         The Yuan was much stronger at 6.8180 after yesterday’s 6.8546: $1. 

         The Pound Sterling was weaker at $1.2791 after yesterday’s $1.2859: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    5    31

     2017    5    30

     2017    5    26

SHAU

SHAU

SHAU

 

 

On holiday

279.25

279.4

On holiday

279.60

$ equivalent 1oz at 0.995 fineness

@    $1: 6.8180

       $1: 6.8615

       $1: 6.8737     

 

   

 

On holiday

$1,265.85

 

 

$1,274.61

On holiday

$1,267.44

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.]

 While the Yuan price of gold has dipped a little, the rise in the Yuan has lifted the dollar price of gold there. Shanghai was trading today at just $2.61 above New York while London opened at $6.61 below Shanghai.

Global currency and gold markets are relatively calm, with the exception of the Yuan which has gone much stronger [over 1% stronger in the last two days] as the People’s Bank of China intervenes in the market place. We see this as a continued attack on speculation and the  efforts to improve the reputation of all Chinese financial markets.

Silver Today –Silver closed at $17.41yesterday after $17.32 at New York’s close. A glance back over the last couple of weeks shows that the silver price pointed the way for gold. It fell just ahead of the fall in the gold price and is now rising as the gold price consolidates at lower levels. Is it leading the way for gold?

LBMA price setting:  The LBMA gold price was set today at $1,263.80 from yesterday’s $1,262.80.  The gold price in the euro was set at €1,127.08 after yesterday’s €1,131.03.

Ahead of the opening of New York the gold price was trading at $1,264.65 and in the euro at €1,127.89. At the same time, the silver price was trading at $17.33. 

Price Drivers

The gold price is consolidating in a tightening range heading towards that strong move that we have been waiting for, for some time now. We do see the 50-day average above the 200-day average now, but more importantly the Technical picture is indicating that the next strong move will be seen short, medium and long term.

Leading Fund Managers are stating that the 2%+ growth in the U.S. is not evident, placing a large question mark over whether last quarter’s lower growth is temporary. They are also saying that E.U. growth is likely to be stronger than U.S. growth. Alongside this, Fed Officials are stating that a correction in the equity markets would be healthy. Add the two factors together and we see a downturn in markets and likely a fall in the dollar.

If we don’t see a rate hike in June we would expect to see the gold price rise and potentially strongly as U.S. investors switch into the gold market there.  

Please bear in mind that many equity investors hold them as they yield more than fixed interest rate securities. If there is a rate hike that difference will narrow causing many shares to adjust downwards until they, once again, yield more than Treasuries.

Gold ETFs – Yesterday, saw no sales or purchases of gold to or from the SPDR gold ETF (GLD) but a purchase of 0.15 of a tonne into the Gold Trust (IAU). Their holdings are now at 847.452 tonnes and at 202.97 tonnes respectively.

Since January 6th 2017 38.838 tonnes have been added to the SPDR gold ETF and the Gold Trust.

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

Shanghai definitely now calling the gold tune

Gold Today –New York closed at $1,256.10 yesterday after closing at $1,257.20 Wednesday. London opened at $1,263.10 today. 

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

         The $: € was slightly stronger at $1.1227 after yesterday’s $1.1234: €1.

         The Dollar index was slightly stronger at 97.08 after yesterday’s 97.01

         The Yen was slightly stronger at 111.10 after yesterday’s 111.80:$1. 

         The Yuan was stronger at 6.8615 after yesterday’s 6.8737: $1. 

         The Pound Sterling was weaker at $1.2871 after yesterday’s $1.2973: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    5    26

     2017    5    25

     2017    5    24

SHAU

SHAU

SHAU

 

 

280.35

279.54

Trading at 280.60

280.04

278.55

$ equivalent 1oz at 0.995 fineness

@    $1: 6.8615

       $1: 6.8737

       $1: 6.8906     

 

  /

$1,263.58

$1,261.82

Trading at $1,266.97

$1,262.18

$1,257.35

Please note that the Shanghai Fixes are for 1 gm of gold. From the Middle East eastward metric measurements are used against 0.9999 quality gold. [Please note that the 0.5% difference in price can be accounted for by the higher quality of Shanghai’s gold on which their gold price is based over London’s ‘good delivery’ standard of 0.995.]

 

New York closed $6.08 lower than Shanghai’s close yesterday. London opened today at a $3.87 discount to Shanghai.

And there you have it. The evidence is clear that Shanghai is pulling both London and New York higher. Shanghai followed New York on the world clocks with London opening after that. While both London and New York are more volatile than Shanghai, Shanghai gold prices in the Yuan have moved steadily higher over the last few days.

This was in the face of the People’s Bank of China trying to control the Yuan and change the formula on which it is permitted to trade.

This year has seen the People’s Bank of China attack speculation. In the gold market rampant speculation has been controlled by putting a ceiling on the amounts traded per contract reducing them in the process. This has made it expensive to speculate in force. We have seen the results of this in a less volatile market there.

Now we have the People’s bank of China not just trying to limit speculative forces but change the orientation of the Yuan exchange rate to a ‘global-centric’ rate from a ‘dollar-centric’ rate. History shows that Chinese markets have lost credibility because of wild speculative forces [particularly the equity markets]. These efforts, while delaying the full lifting of Capital Controls, are stabilizing markets. We foresee that, as a result, we will see Chinese markets reputations improve and gain a stronger foothold in world markets.

In the gold world we foresee more producers and buyers of gold on contract turn to the Shanghai Benchmark prices from the pm London price setting. This is particularly so as the London price setting is different from the ‘spot’ prices at the time of price setting.

We are now convinced that gold’s pricing power has moved to Shanghai.

Silver Today –Silver closed at $17.16 yesterday after $17.19 at New York’s close.

LBMA price setting:  The LBMA morning gold price was set today at $1,265.00 from yesterday’s $1,257.10.  The gold price in the euro was set at €1,130.37 after yesterday’s €1,120.81.

Ahead of the opening of New York the gold price was trading at $1,265.80 and in the euro at €1,130.38. At the same time, the silver price was trading at $17.26 

Price Drivers

Currency markets across the world are relatively steady today as the gold price, once again nudges up against overhead resistance on this, the last and most active day of the week, the last week in May. Will the U.S. be volatile today in the gold market or silver market? We see New York following London higher. With long positions at low levels on COMEX that ‘paper’ market is more likely to go long than short, we feel. Hence we expect a positive day for gold there. Before New York opened gold was already pushing up through resistance, but more is needed before the break is convincing!

Will the present moves bring the long awaited strong move in gold and silver prices? We don’t know for sure, as we are in an important area for both gold & silver from a long term perspective, making any strong move now significant for the long term.

G-20 meeting

The G-20 meeting in Sicily is the center of attention for the media. In the past this has usually turned out to  be a non-event, but with President Trump there already lecturing on NATO allies failure to pay their bills for the protection the U.S. affords them, we expect a far more lively meeting. Of importance is now the huge surplus Germany has on the trade front. This has been apparent from the day the E.U. was formed as it prevented the exchange rate used in global trade by Germany [the euro] from reducing these surpluses, as it rose. If Germany still had the Deutschemark its rate would be so high as to prevent the surplus from happening in the first place. To bleat about it now is a little pointless and non-productive and far too late.

U.S. physical gold investors remain on the sidelines still and will do so until they see a strong rise in the gold price.

Gold ETFs – Yesterday, saw no sales or purchases of gold to or from the SPDR gold ETF and no change in the holdings of the Gold Trust. Their holdings are now at 847.452 tonnes and at 202.82 tonnes respectively.

Julian D.W. Phillips 

 GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance 

Gold nudging upside resistance

Gold Today –New York closed at $1,260.30 yesterday after closing at $1,255.00 Friday. London opened at $1,260.05 today. 

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

         The $: € was weaker at $1.1252 after yesterday’s $1.1240: €1.

         The Dollar index was slightly weaker at 96.90 after yesterday’s 96.94

         The Yen was slightly stronger at 111.24 after yesterday’s 111.34:$1. 

         The Yuan was barely changed at 6.8901 after yesterday’s 6.8903: $1. 

         The Pound Sterling was weaker at $1.2980 after yesterday’s $1.3018: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    5    23

     2017    5    22

     2017    5    19

SHAU

SHAU

SHAU

279.59

279.29

Trading unavailable

279.76

279.28

$ equivalent 1oz at 0.995 fineness

@    $1: 6.8901

       $1: 6.8903

       $1: 6.8929     

  /

$1,257.10

$1,255.27

/

$1,257.86

$1,255.22

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 281.1 towards the close in Shanghai. Adjusting to the higher quality of gold traded there this price translates into $1,263.95. London opened at a $3.90 discount to Shanghai.

London and New York took gold higher yesterday, but today Shanghai lifted the gold price through resistance with London going higher on the back of Shanghai. All in all, the discounts of London and New York to Shanghai are very small, once again.

One misunderstanding some commentators have is that foreign banks are being forced to use the International Gold Exchange in Shanghai. The fact that many foreign banks have local presences and Chinese banks are Chinese means they can participate alongside the Chinese gold investor on the SGE. This places them in a position to effectively arbitrage western markets and Shanghai, through using currency books, positions in London and Shanghai, only moving gold into Shanghai when  their positions get too large in London. It also allows them to remain opaque in their dealings, while continuing to shift gold bullion into China. This means their positions are much, much bigger than seems to be the case on the International Shanghai Gold Exchange.

The result is far closer prices between the three Exchanges than has been the case in the past.

We note a major bank for the first time [Citibank] is acknowledging that Shanghai’s influence on the gold price will grow. But these analysts state that “Shanghai still holds a prominent position as the largest gold futures market outside of the U.S., despite a reduction in Shanghai Futures Exchange volume for the year to date to around 450 million ounces. By comparison, New-York based COMEX gold volume has grown 15% year-on-year to around 2.1 billion ounces.” We believe this distorts the real gold picture in the two markets.

What is true is that COMEX has a turnover of 2.1 billion ounces of ‘paper gold’ [Gold derivatives – Options and Futures] Of this  between 1% and 5% is actual gold bullion, whereas all of Shanghai’s gold trade is physical gold bullion. i.e. COMEX trades between 653 tonnes and 3,266 tonnes to Shanghai’s  almost 14,000 tonnes annually. COMEX’s turnover is far closer to 653 tonnes of physical gold bullion than 3,000 tonnes. This makes New York only 5% of Shanghai’s physical gold bullion turnover.

This is why we see Shanghai becoming, if not there already, the world’s gold hub for physical gold.

Silver Today –Silver closed at $17.14 yesterday after $16.84 at New York’s close yesterday.

LBMA price setting:  The LBMA am gold price was set today at $1,259.90 from yesterday’s $1,255.25.  The gold price in the euro was set at €1,119.61 after yesterday’s €1,117.17.

Ahead of the opening of New York the gold price was trading at $1,259.65 and in the euro at €1,121.35. At the same time, the silver price was trading at $17.13. 

Price Drivers

The gold price continued to rise in the U.S. dollar but only slowly in the euro. For a convincing breakout in the gold price we need to see it rise strongly in the euro too. With the Chinese Yuan doing its best to stay close to the moves in the dollar, we expect Shanghai to remain stable. The dollar continues to slip albeit at a slower pace. Meanwhile it continues to consolidate, while nudging overhead resistance.

As you can see below U.S. buying of physical gold via the SPDR gold ETF [GLD] resumed gently. This is not enough to move prices heavily, but it is an indication of returning U.S. demand.

Gold ETFs – Yesterday, saw purchases of 1.776 of a tonne into the SPDR gold ETF but no change in the holdings of the Gold Trust. Their holdings are now at 852.483 tonnes and at 202.82 tonnes respectively.

Since January 6th 2017 43.709 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 part of the fabric of Indian society

 Gold Today –New York closed at $1,248.90 yesterday after closing at $1,258.70 Wednesday. London opened at $1,248.20 today. 

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

         The $: € was slightly stronger at $1.1120 after yesterday’s $1.1131: €1.

         The Dollar index was stronger at 97.73 after yesterday’s 97.57

         The Yen was weaker at 111.25 after yesterday’s 110.77:$1. 

         The Yuan was weaker at 6.8929after yesterday’s 6.8902: $1. 

         The Pound Sterling was weaker at $1.2950 after yesterday’s $1.3036: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    5    19

     2017    5    18

     2017    5    17

SHAU

SHAU

SHAU

280.67

277.51

Trading at 279.75

280.6

277.63

$ equivalent 1oz at 0.995 fineness

@    $1: 6.8929

       $1: 6.8814

       $1: 6.8919     

  /

$1,263.61

$1,254.33

/

$1,263.29

$1,254.87

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 trading level towards the close translates into $1,257.34. New York closed at a $8.44 discount to Shanghai’s close yesterday. London opened at a discount of $9.14 Shanghai’s close today.

As you can see above, Shanghai did not pull back today as far as New York did.  With Shanghai now proving less volatile than London or New York we expect the pattern being formed now will lead to Shanghai giving a better indication of the direction of the gold price. At the moment that is higher, after this consolidation.

Silver Today –Silver closed at $16.61 yesterday after $16.89 at New York’s close Wednesday.

LBMA price setting:  The LBMA gold price was set today at $1,251.85 from Thursday’s $1,261.35.  The gold price in the euro was set at €1,120.68 after yesterday’s €1,135.02.

Ahead of the opening of New York the gold price was trading at $1,253.00 and in the euro at €1,121.55. At the same time, the silver price was trading at $16.80. 

Price Drivers

With the gold price shrugging off potential falls, we now expect to see it trade in a tightening range until the gold market is in balance, before the next strong move either way.The dollar is slightly stronger today in what is a normal market reaction, but we do not expect this to last for long.

India & GST

While the list of GST levels to be imposed in July has now been issued, the duty to be levied on gold [and services] is still to be finalized.  It is expected to be 3%.

When we look back at the actions of Modi and his government in India and on gold, since he came to power, we see that Indian governments are still unhappy with gold in the country and will always be. This is not a small problem for that government, when you consider that the total gold holdings of the world’s central banks is around 34,000 tonnes, private citizens and institutions in India hold around 24,000 tonnes, an amount that is rising by around 1,000 tonnes a year.

Why their dislike? Because gold lies outside government control, just as it did in the U.S. before it was confiscated in 1933. Thereafter, when all U.S. citizens could only use banknotes and the banking system, the U.S. government completely controlled the financial system. All governments need to do that if they want total control of a nation’s finances, despite any objection from their own people.

Every attempt to pull the Indian gold trade into the Indian banking system [as it is in the west] has failed and will continue to fail because of the financial mistrust between the government and its citizens.

But gold in India is far more to its citizens, than it was to U.S. citizens, prior to 1933. In India, it is tied in with religion, family as well as financial security. It is part of the fabric of society. This is unlikely to change in the future. It is unlikely, that any ban on gold dealing there would work because it didn’t work in the past.

So the expected 3% GST level being mooted in India is simply expected to incite more black market activity including making extremely profitable the business of smuggling of gold into the country

Gold ETFs – Yesterday, saw sales of 1.184 tonnes from the SPDR gold ETF (GLD) but purchases of 0.53 of a tonne into the Gold Trust (IAU). Their holdings are now at 850.891 tonnes and at 202.82 tonnes respectively.

Julian D.W. Phillips 

 GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance 

 

Technical picture positive for gold 

Gold Today –New York closed at $1,227.90 Friday after closing at $1,219.30 Thursday. London opened at $1,231.00 today. 

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

         The $: € was weaker at $1.0979 after Friday’s $1.0864: €1.

         The Dollar index was weaker at 98.82 after Friday’s 99.64

         The Yen was stronger at 113.32 after Friday’s 113.75:$1. 

         The Yuan was stronger at 6.8919 after Friday’s 6.9047: $1. 

         The Pound Sterling was stronger at $1.2919 after Friday’s $1.2875: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    5    12

     2017    5    11

     2017    5    10

SHAU

SHAU

SHAU

/

274.75

273.62

/

274.90

274.02

$ equivalent 1oz @    $1: 6.8919

       $1: 6.9047

       $1: 6.9040     

  /

$1,237.66

$1,232.70

/

$1,238.34

$1,234.50

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 276.90 towards the close today. This translates into $1,244.66. New York closed at a $16.76 discount to Shanghai’s close Friday. London opened at a discount of $13.66 to Shanghai’s close today.

Shanghai continues to rise, pulling London higher and now New York higher. Pricing power is with Shanghai today.

On today’s moves, we would say Shanghai is dominating pricing power at the moment.

LBMA price setting:  The LBMA gold price was set today at $1,231.50 from Friday’s $1,227.90.  

The gold price in the euro was set at €1,122.20 after Friday’s €1,129.21.

Ahead of the opening of New York the gold price was trading at $1,235.50 and in the euro at €1,125.48. At the same time, the silver price was trading at $16.77. 

Silver Today –Silver closed at $16.44 Friday after $16.32 at New York’s close Thursday.

Price Drivers

The Technical picture is positive today so the gold price should rise steadily today, barring new news that halts its rise. But the main influence on today’s prices comes from Shanghai. While the discount of New York and London have been widening of late it is the lifting of today’s prices in Shanghai has caused prices in London and New York to suddenly rise. We expect the upward pressure from Asia to continue as the dollar weakness drops prices in India.

Sometimes it is difficult for gold investors to appreciate that the day’s news items are not responsible for gold price moves. Gold prices in different currencies are also not well understood. For instance, in India gold prices have been dropping because of the strong Rupee, which is in a country where it is low prices that incite gold buying. So while demand for gold has been strong there, only because prices are now historically low and the prospect of a new tax imposition from government is accelerating buying, the rise in the value of the Rupee has given Indian buyers this current opportunity. The average Indian investor would never be prompted by some Trump pronouncement to go into the gold market.  They would  only on gold prices that have stopped falling.

In China the GDP growth of 6.9% is a sure indication that individual and institutional wealth continues to grow expanding Chinese middle classes and their capacity to buy gold there. Demand for gold remains robust there.

So, on a day like today, when there is no specific gold related news, prices can rise in all currencies due to growing wealth in Asia alongside a weakening dollar. This trend should continue.

What is a major threat that would be positive for gold is North Korea and its psychopathic President intent on producing a clear and present danger to the U.S., no matter what risk this brings to North Korea’s world. The threat of sanctions and sanctions themselves may affect the people of North Korea but not the palace. It seems to us that that country’s President will not stop until stopped. But as yet we do not believe this has impacted global demand.

Gold ETFs – Friday once again saw no change in the SPDR gold ETF or the Gold Trust. Their holdings are now at 851.891 tonnes and at 201.69 tonnes respectively.

 Julian D.W. Phillips 

 GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance 

Shanghai leading gold higher?

 Gold Today –New York closed at $1,224.10 yesterday after closing at $1,219.30 yesterday. London opened at $1,228.55 today. 

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

         The $: € was slightly stronger at $1.0864 after yesterday’s $1.0870: €1.

         The Dollar index was slightly weaker at 99.64 after yesterday’s 99.65

         The Yen was stronger at 113.75 after yesterday’s 114.19:$1. 

         The Yuan was slightly stronger at 6.9047 after yesterday’s 6.9056: $1. 

         The Pound Sterling was weaker at $1.2875 after yesterday’s $1.2941: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    5    12

     2017    5    11

     2017    5    10

SHAU

SHAU

SHAU

/

273.62

273.79

/

274.02

273.91

$ equivalent 1oz @    $1: 6.9047

       $1: 6.9040

       $1: 6.9064     

  /

$1,232.70

$1,233.03

/

$1,234.50

$1,233.57

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 275.60 towards the close today. This translates into $1,236.49. New York closed at a $17.39 discount to Shanghai’s close yesterday. London opened at a discount of $7.94 to Shanghai’s close today.

While New York rose slightly yesterday, Shanghai rose strongly and is leading the way for London.

On today’s moves, we would say Shanghai is dominating pricing power. As we said yesterday, Shanghai needed to stop falling before prices turn around. It has turned higher now.

LBMA price setting:  The LBMA gold price was set today at $1,227.90 from yesterday’s $1,221.00.  

The gold price in the euro was set at €1,129.21 after yesterday’s €1,123.48.

Ahead of the opening of New York the gold price was trading at $1,231.30 and in the euro at €1,128.60. At the same time, the silver price was trading at $16.45. 

Silver Today –Silver closed at $16.32 yesterday after $16.22 at New York’s close yesterday.

Price Drivers

Technically, it is time for gold to rise up into the pattern that it is forming. Its failure to breakdown further and the performance of the three gold markets across the world point higher today.

The latest figures on inflation in the U.S. has been hoped for and expected and is positive for the gold price. With negative interest rates here to stay for some time to come, the influence on gold is positive.

India

Demand for gold at the Akshaya Tritiya festival at the end of April was stronger than has been seen in the past confirming the problems with shortages of cash have dissipated. It is clear that Indian demand for gold is, once again, robust. Estimates for this year’s demand [because of positive forecasts for the monsoon as well] have gone as high as 1,000 tonnes. That’s official demand, excluding smuggled gold. In the past WGC estimates from years ago guesstimated smuggled gold was around 250 tonnes. It has certainly grown since then and will grow much more if the 5% GST tax is imposed on gold sales.

If one accepts this, China and India account for just over 80% of total supply [including scrap] of gold annually. This leaves very little for the rest of the world’s demand. If the rest of the world’s demand jumps, it will have a disproportionate impact on the gold price until that demand is pulled back by higher prices precipitating sales.

Gold ETFs – Yesterday once again saw no change in the SPDR gold ETF or the Gold Trust. Their holdings are now at 851.891 tonnes and at 201.69 tonnes respectively.

Julian D.W. Phillips 

 GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance 

Resolution point for gold

 Gold Today –New York closed at $1,219.30 yesterday after closing at $1,219.80 Tuesday. London opened at $1,222.00 again, today. 

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

         The $: € was slightly weaker at $1.0870 after yesterday’s $1.0872: €1.

         The Dollar index was slightly stronger at 99.65 after yesterday’s 99.43

         The Yen was weaker at 114.19 after yesterday’s 113.95:$1. 

         The Yuan was slightly weaker at 6.9056 after yesterday’s 6.9040: $1. 

         The Pound Sterling was weaker at $1.2941 after yesterday’s $1.2969: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    5    11

     2017    5    10

     2017    5    9

SHAU

SHAU

SHAU

/

273.79

275.04

/

273.91

274.59

$ equivalent 1oz @    $1: 6.9040

       $1: 6.9064

       $1: 6.9035

      

  /

$1,233.03

$1,238.66

/

$1,233.57

$1,236.64

 

The Shanghai Gold Exchange was trading at 274.00 towards the close today. This translates into $1,229.12. New York closed at a $14.82 discount to Shanghai’s close yesterday. London opened at a discount of $7.12 to Shanghai’s close today.

With China continuing to see a slowly falling gold price, New York and London have stopped falling [for now?] seeing prices sitting on support around $1,220. It is clear that gold prices in Shanghai have to stop falling if we are to see gold prices turn around.

We need a clear move in gold prices to see where pricing power lies in the gold world.

LBMA price setting:  The LBMA gold price was set this am at $1,221.00 from yesterday’s $1,222.95.  

The gold price in the euro was set at €1,123.48 after yesterday’s €1,125.02.

Ahead of the opening of New York the gold price was trading at $1,223.65 and in the euro at €1,126.91. At the same time, the silver price was trading at $16.32. 

Silver Today –Silver closed at $16.22 yesterday after $16.15 at New York’s close yesterday.

 Price Drivers

We are seeing the influence of falling gold prices in Shanghai on New York and London, as we commented above, but New York prices are holding on despite no gold ETF demand. This demand has been responsible for U.S. gold prices rising. Until we see the strong move, we expect [either way], we cannot clearly see the way forward. We are at one of those junctures we call a ‘point of resolution’.

When all markets see less and less volatility it does mean that demand and supply have come into balance. Once that happens, it takes a relatively small sale or purchase to trigger a strong move. The situation is also ripe for a classic ‘bear raid’ one would think. But the growing influence of Shanghai and its policies against speculation has recently made such raids unsuccessful. So we sit and wait!

Events like the Comey firing do not move gold prices. What they do do, is to cause us to reflect on the state of President Trump’s administration and its ability to get things done as he promised. Trump’s promises of major tax cuts, combined with promises of infrastructure renewal, have not yet happened. While we expected these promises to take time to implement, the problems President Trump is hitting in his own party, as well as in government, point to enormous difficulty in getting these measures passed by Congress and the Senate, when he does try to get them through. Hence, we have to lower our expectations of “making America Great again”. Overall this is supportive of gold prices.

Gold ETFs – Yesterday once again saw no change in the SPDR gold ETF or the Gold Trust. Their holdings are now at 851.891 tonnes and at 201.69 tonnes respectively.

 Julian D.W. Phillips 

 GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance 

A critical juncture for the gold price

 

Gold Today –New York closed at $1,219.80 yesterday after closing at $1,227.20 yesterday. London opened at $1,222.00 today. 

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

         The $: € was stronger at $1.0872 after yesterday’s $1.0904: €1.

         The Dollar index was slightly stronger at 99.43 after yesterday’s 99.34

         The Yen was weaker at 113.95 after yesterday’s 113.74:$1. 

         The Yuan was stronger at 6.9040 after yesterday’s 6.9064: $1. 

         The Pound Sterling was stronger at $1.2969 after yesterday’s $1.2926: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    5    10

     2017    5    9

     2017    5    8

SHAU

SHAU

SHAU

/

275.04

275.59

/

274.59

275.30

$ equivalent 1oz @    $1: 6.9040

       $1: 6.9064

       $1: 6.9035

      

  /

$1,238.66

$1,241.66

/

$1,236.64

$1,239.83

 The Shanghai Gold Exchange was trading at 275.60 towards the close today. This translates into $1,236.62. New York closed at a $16.82 discount to Shanghai’s close yesterday. London opened at a discount of $14.62 to Shanghai’s close today.

Today is one of those days when we can see just where pricing power lies. New York has tried to pull prices back well below support, hitting $1,216 at one point. Shanghai took prices higher today in their consolidation process, but London moved in line with New York last night.

How New York and London perform today becomes critical. If Shanghai falls, then pricing power sits in London and New York, today.

LBMA price setting:  The LBMA gold price was set today at $1,222.95 from yesterday’s $1,225.15.  

The gold price in the euro was set at €1,125.02 after yesterday’s €1,124.09.

Ahead of the opening of New York the gold price was trading at $1,223.65 and in the euro at €1,125.51. At the same time, the silver price was trading at $16.28. 

Silver Today –Silver closed at $16.15 yesterday after $16.28 at New York’s close yesterday.

Price Drivers

The gold price continues to consolidate around $1,220 support. New York tried to take it lower but Shanghai is holding higher levels. With London following New York today we are at a critical juncture for the gold price. If it convincingly breaks down below current levels, strongly, it is bad news for the gold market in the short term. If it rises it will be signifying that the current pattern being formed is positive for the gold price.

The fundamentals of strong Asian demand and a weak dollar are positive for gold despite it moving with the dollar, down recently. It comes back to who controls the gold price?

As we said yesterday we are soon to see a strong move, either way. We can’t be more precise than ‘soon’. The fundamentals certainly point to higher prices, but have been doing so all the way through the fall of late.

Volatility

Across the financial world volatility levels have fallen to extremely low levels.  In this almost blithe atmosphere realities are almost being ignored. Equity markets are at record levels, higher than they should be according to their earnings levels and bond yields far too low given the size of global debt. Granted, the U.S. economy is looking healthy, but not so healthy as to see wages rise. Europe is starting to give evidence of growing economies and China is looking healthy. This is when investors take a longer view and realize that the best is here and not, ‘still to come’.   A lot of global uncertainties have dissipated this year [in the E.U., with France electing  macron, a pro-EU centrist, etc], but markets have discounted much of this.  But few look around and say the future is rosy.

History tells us that this is the sort of investment climate when the markets are close to their tops and the selling starts. One should be contemplating a defensive portfolio.  

Gold ETFs – Yesterday saw no change in the SPDR gold ETF (GLD) or the Gold Trust (IAU). Their holdings are now at 851.891 tonnes and at 201.69 tonnes respectively.

Since January 4th 2016, 252.227 tonnes of gold have been added to the SPDR gold ETF and to the Gold Trust.  Since January 6th 2017 42.171 tonnes have been added to the SPDR gold ETF and the Gold Trust.

Julian D.W. Phillips 

 GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance 

To ensure you can benefit from the future higher gold prices we will see then, you need to hold it in a manner that makes sure it can’t be taken from you. Contact us at admin@stockbridgemgmt.com to buy physical gold in a way that we feel, removes the threat of it being confiscated. We’re the only storage company that offers that!
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  Global Gold Price (1 ounce)
  Today Yesterday
Franc Sf1,231.79 Sf1,228.90
US $1,223.65 $1,225.60
EU €1,125.51 €1,124.56
India Rs.79,072.26 Rs. 79,209.30

Muted effect on gold from Macron victory in France

 

Gold Today –New York closed at $1,229.30 Friday after closing at $1,239.50 Thursday. London opened at $1,230.00 today. 

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

         The $: € was weaker at $1.0973 after Friday’s $1.0964: €1.

         The Dollar index was weaker at 98.73 after Friday’s 98.83

         The Yen was weaker at 112.68 after Friday’s 112.23:$1. 

         The Yuan was weaker at 6.9035 after Friday’s 6.8994: $1. 

         The Pound Sterling was stronger at $1.2975 after Friday’s $1.2935: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    5    8

     2017    5    5

     2017    5    4

SHAU

SHAU

SHAU

/

274.53

277.91

/

275.73

276.41

$ equivalent 1oz @    $1: 6.9035

       $1: 6.8994

       $1: 6.8949

      

  /

$1,237.62

$1,253.68

/

$1,243.03

$1,246.17

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 275.6 towards the close today. This translates into $1,236.71. New York closed at a $7.41 discount to Shanghai’s close yesterday. London opened at a discount of $6.71 to Shanghai’s close today.

Arbitrageur margins are tight at around $7 so, we see the global gold market prices very close, as they all move down roughly in line with each other.

LBMA price setting:  The LBMA gold price was set today at $1,229.70 from Friday’s $1,239.40.  

The gold price in the euro was set at €1,124.45 after Friday’s €1,130.99.

Ahead of the opening of New York the gold price was trading at $1,230.30 and in the euro at €1,124.07. At the same time, the silver price was trading at $16.33. 

Silver Today –Silver closed at $16.38 Friday after $16.47 at New York’s close Thursday.

 Price Drivers

The Macron victory implies that the E.U. will hold together in the future and that the euro will not collapse. While Italy remains uncertain on the subject, it is not enough to curb the optimism that pervades markets this morning.

What is uncertain is the ability of the French President, without a political party behind him, to govern effectively. Will he try to rule by government decree? We will have to wait until mid-June and the Parliamentary elections to see if he can establish a majority and govern, or if he will simply become a figurehead.

The gold price had discounted this result so there are no major moves taking place in Europe. The dollar continues to weaken which should mean higher gold prices, but, of late, the gold price has been slipping with the dollar. Will the $1,230 level hold or will we see more slippage to around $1,220 where strong support sits.

What we did see early in the day was an attempt to drive the gold price down by the selling of $300 million of gold futures early in Europe’s day. It failed to break the gold price down which was then seen as recovering to the mid-$1,230 area.

London Vault Holdings to be published soon.

The LBMA and the LPMCL announced that from summer 2017 the LBMA will be publishing the gold and silver physical precious metals holdings of the London vaults, with the platinum and palladium holdings to be published at a later date.

The data only includes physical metal held within the London environs and does not include precious metals physical holdings readily available at short notice in other secure overseas vaulting facilities.

Gold ETFs – Friday saw no change in the SPDR gold ETF but the Gold Trust saw sales of 1.34 tonnes. Their holdings are now at 853.075 tonnes and at 201.69 tonnes respectively.

 Julian D.W. Phillips 

 GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance 

Gold falls further on Fed talk but fundamentals still remain good

Gold Today –New York closed at $1,239.50 yesterday after closing at $1,256.90 Wednesday. London opened at $1,234.00 today. 

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

         The $: € was weaker at $1.0932 after yesterday’s $1.0912: €1.

         The Dollar index was slightly stronger at 99.11 after yesterday’s 99.08

         The Yen was weaker at 112.96 after yesterday’s 112.16:$1. 

         The Yuan was weaker at 6.8949 after yesterday’s 6.8921: $1. 

         The Pound Sterling was weaker at $1.2887 after yesterday’s $1.2923: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    5    4

     2017    5    3

     2017    5    2

SHAU

SHAU

SHAU

/

280.58

281.20

/

280.04

280.79

$ equivalent 1oz @    $1: 6.8949

       $1: 6.8921

       $1: 6.8969

      

  /

$1,266.23

$1,268.15

/

$1,263.80

$1,266.30

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 277.10 towards the close today. This translates into $1,245.02. New York closed at a $5.52 discount to Shanghai’s close yesterday. London opened at a discount of $11.02 to Shanghai’s close today.

London is leading the way down at the moment, following Shanghai’s close and New York is beginning to show signs of buyers coming in. But we note that not until today did London outrun the others in taking the gold price down.

LBMA price setting:  The LBMA gold price was set today at $1,235.85 from yesterday’s $1,253.95.  

The gold price in the euro was set at €1,130.18 after yesterday’s €1,148.88.

Ahead of the opening of New York the gold price was trading at $1,234.35 and in the euro at €1,129.53. At the same time, the silver price was trading at $16.49. 

Silver Today –Silver closed at $16.47 yesterday after $16.83 at New York’s close Tuesday. The silver price’s fall is slowing another sign that the gold prices may well be looking to establish a bottom at current levels.

 Price Drivers

The Fed remains positive on U.S. growth despite the slowdown in the first quarter.  The indications are that the joblessness rate is now at maximum employment and the inflation rate getting close to the targeted 2%. This allows the Fed to continue discussions on shrinking the Fed’s Balance Sheet and leaving the door open for a June rate hike. The market saw this as negative for gold which has fallen heavily in the last day. We had forecast a strong move either way. It became clear that the Fed’s statement was the trigger for the fall, albeit that it has taken the New York, Shanghai and London sessions to make that happen.

The fundamentals remain good for gold, so we are watching to see if the fall in gold prices will hold for long?

France

It is looking more and more like a President Macron in France, but one wonders, without a political party behind him, how will he carry out his policies? Each policy will be assessed by the current political parties before they give him their backing. A victory by him will mean a continuation of the E.U. in its present form, for now.

Gold prices long-term.

Over the next decade, we will see a heavy fall in the volume of newly mined gold. Due to the decaying state of world politics and growing divisions in the monetary world, we are certain that global demand for gold will continue to rise. At some point the availability of scrap gold will suddenly shrink as the inevitability of a price surge becomes imminent. There will be no turning back of gold prices from then on.

Gold ETFs – Yesterday saw no sales or purchases from or into the SPDR gold ETF but the Gold Trust saw purchases of 0.41 of a tonne. Their holdings are now at 853.362 tonnes and at 204.23 tonnes respectively.

Julian D.W. Phillips 

 GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance 

Gold’s move east unstoppable

Gold Today –New York closed at $1,256.90 yesterday after closing at $1,257.20 Tuesday. London opened at $1,254.00 today. 

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

         The $: € was weaker at $1.0912 after yesterday’s $1.0908: €1.

         The Dollar index was weaker at 99.08 after yesterday’s 99.13

         The Yen was barely changed at 112.16 after yesterday’s 112.14:$1. 

         The Yuan was stronger at 6.8921 after Friday’s 6.8969: $1. 

         The Pound Sterling was stronger at $1.2923 after Friday’s $1.2875: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    5    3

     2017    4    2

     2017    4    28

SHAU

SHAU

SHAU

/

281.20

282.69

/

280.79

282.67

$ equivalent 1oz @    $1: 6.8921

       $1: 6.8969

       $1: 6.8944

      

  /

$1,268.15

$1,275.33

/

$1,266.30

$1,275.24

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 280.70 towards the close today. This translates into $1,261.78. New York closed at a $4.88 discount to Shanghai’s close yesterday. London opened at a discount of $7.78 to Shanghai’s close today.

LBMA price setting:  The LBMA gold price was set today at $1,253.95 from yesterday’s $1,255.80.  

The gold price in the euro was set at €1,148.88 after yesterday’s €1,151.27.

Ahead of the opening of New York the gold price was trading at $1,254.20 and in the euro at €1,149.06. At the same time, the silver price was trading at $16.81. 

Silver Today –Silver closed at $16.83 yesterday after $16.89 at New York’s close Monday. Should the gold price return to an upward path, we see silver racing higher than gold’s rise.

 Price Drivers

The gold price remains in a vulnerable position, capable once more, of making a strong move either way. A glance at the fundamental factors shows a rise in the dollar gold price remains more likely than a fall. What’s more, we note that despite this vulnerability all we have seen by way of opportunist, speculative attacks have been dealers marking down prices in expectation of sales. The lack of bear raids from New York, tells its own tale about the state of the gold market, particularly the physical gold market. Should they continue to be absent, it would be a piece of solid evidence that the influence of COMEX over the gold price is waning.

The unstoppable shift of gold bullion to the east.

As we pointed out in the piece on Swiss gold exports demand from Asia remains very strong indeed. The refineries in Switzerland have been working 24 hours a day and 6 days a week to convert gold into metric measurement bars. This has gone on for many years now and is set to continue for the foreseeable future. It is quite remarkable that the developed gold world is quiet on the subject because it is only a matter of time before the western gold markets becomes secondary markets to Shanghai. That is why one should always deal in gold [without a re-refining process] in metric measurements

The Fed

We expect no actions from the Fed today, but as usual, any slight change in the language of the statement will affect financial markets across the globe. The recent weak data in the U.S. is expected to be temporary but we would look to the Fed’s statement for such assurances. If it is a concern to the Fed, we expect the gold price to benefit.

The Fed must be frustrated by the delay in the implementation of President Trump’s election promises, to which their policy should be riveted. They cannot afford to be out of step with government, which now seems unable to deliver on its promises, so remain directionless until the way forward for government is clarified.

Gold ETFs – Yesterday saw no sales or purchases from or into the SPDR gold ETF or the Gold Trust. Their holdings are now at 853.362 tonnes and at 203.82 tonnes respectively.

Julian D.W. Phillips 

 GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance 

Asia dominant in Swiss gold exports. India top recipient

Swiss gold exports still flowing East.  India top recipient

 Gold Today –New York closed at $1,257.20 yesterday after closing at $1,265 Friday. London opened at $1,255.00 today. 

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

         The $: € was stronger at $1.0908 after Friday’s $1.0940: €1.

         The Dollar index was stronger at 99.13 after Friday’s 98.76

         The Yen was weaker at 112.14 after Friday’s 111.37:$1. 

         The Yuan was weaker at 6.8969 after Friday’s 6.8944: $1. 

         The Pound Sterling was weaker at $1.2875 after Friday’s $1.2939: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    5    2

     2017    4    28

     2017    4    27

SHAU

SHAU

SHAU

/

282.69

282.77

/

282.67

282.81

$ equivalent 1oz @    $1: 6.8969

       $1: 6.8944

       $1: 6.8940

      

  /

$1,275.33

$1,275.77

/

$1,275.24

$1,275.95

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 281.30 towards the close today. This translates into $1,263.60. New York closed at a $6.40 discount to Shanghai’s close yesterday. London opened at a discount of $8.60 to Shanghai’s close today.

Shanghai re-opened today after the May Day holiday so will not be at usual speed until tomorrow.

LBMA price setting:  The LBMA gold price was set today at $1,255.80 from Friday’s $1,265.55.  

The gold price in the euro was set at €1,151.27 after Friday’s €1,159.99.

Ahead of the opening of New York the gold price was trading at $1,255.75 and in the euro at €1,151.11. At the same time, the silver price was trading at $16.93. 

Silver Today –Silver closed at $16.89 yesterday after $17.30 at New York’s close Friday. Should the gold price return to an upward path, we see silver racing higher than gold’s rise.

Price Drivers

London and Shanghai were closed yesterday, so New York dominated the gold price. We saw small sales of gold from the Gold Trust, but not an amount likely to affect the gold price. But with the dollar falling at the same time as the gold price the market is seeing factors that are not strong enough to hit the gold price more than for a short period of time. History has it that the gold price should be rising when the dollar falls, so we question the current gold price’s ability to hold at this level and direction for long.

With London and Shanghai closed yesterday, control over the gold price lay in New York’s hands. We saw dealers marking down the gold price on little negative news. As you can see above, after New York’s lowering of the gold price, demand in China has not yet responded. With London open today as well, we expect tomorrow will see global gold prices point the way forward.

What could be temporarily softening the gold price is the threat of war in Korea now appears to be abating, for now.

From a Technical viewpoint, the gold price has fallen through support to just above the next level of support.

India & China imports of gold from Switzerland

Many may think the gold price reflects demand and supply of physical gold. It doesn’t. It primarily reflects marginal supply and demand, speculative activity and the assumptions of the main dealers as to where the market is going. The physical demand and supply of gold is mainly directly contracted between physical buyers and sellers, with the contract price, primarily the London pm price setting, but for a growing number of market professionals the Shanghai gold Fix is being used by both parties to the contract. In other words the trading in physical gold, in the case of around 95%+ of such buyers and sellers, does not influence the gold price.

Should the buyers of gold demand more than the suppliers can provide in the physical market, then the extra demand will overwhelm the gold price. This is why it is so important to keep ones finger on the pulse of the physical market. That’s why we keep our eyes firmly on the Shanghai Gold Exchange, the largest physical market in the world. So, when we see the Swiss export monthly figures to, in particular India and China, growing so strongly over time we know there is a point when they will overwhelm supply and then affect the gold price significantly. Last month showed clearly the volumes of physical gold demanded by those two countries.

In March exports from Switzerland, in figures reported by the Swiss Customs Administration, show that India, was easily the top recipient, taking 55.6 tonnes.  Hong Kong imported 24.3 tonnes and the Chinese Mainland 24.0 tonnes directly.  These latter figures confirm that of total Chinese imports around 40-50% flow directly into the Chinese Mainland through other ports of entry than Hong Kong. (See: March Swiss gold exports show India no.1 again.  

India, Hong Kong and China alone accounted for around 74% of Switzerland’s total gold exports, while Asia and the Middle East accounted for just under 88%, emphasizing the continuing flows of gold from West to East.

Total February gold imports totaled over 89 tonnes in February into India.  With only 37.2 tonnes being sourced from Switzerland that meant that nearly 60% of Indian gold imports were sourced from countries other than Switzerland during that month which puts an additional new complexion on likely total Indian gold imports for the year. These figures exclude the, not reported, smuggling of gold into the country.

Why through Switzerland? London and New York deal in ounces, whereas Asia deals in the metric measurements of grams and kilos. This is why to ensure one can always deal in gold [without a re-refining process] it is better to buy bars in metric measurements

Gold ETFs  

Yesterday saw no sales or purchases from or into the SPDR gold ETF but a sale of 0.54 of a tonnes from the Gold Trust. Their holdings are now at 853.362 tonnes and at 203.82 tonnes respectively.

Since January 6th 2017 45.772 tonnes have been added to the SPDR gold ETF and the Gold Trust.

Julian D.W. Phillips 

 GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance 

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  Global Gold Price (1 ounce)
  Today Yesterday
Franc Sf1,249.35 Sf1,255.75
US $1,255.75 $1,265.30
EU €1,151.11 €1,159.76
India Rs.80,668.12 Rs. 82,763.27

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