U.S. Gold ETFs put on another 4.75 tonnes

Gold TodayGold closed in New York at $1,279.00 on Tuesday up from Monday’s $1,274.40. On Wednesday morning in Asia it held at $1,272.75, as most exchange rates were close to yesterday’s levels, except the euro.

LBMA price setting:  $1,270.90 barely up from Monday’s $1,270.10.

Yuan Gold Fix

Trade Date Contract Benchmark Price AM Benchmark Price PM
2016  05  18

2016  04  17

SHAU

SHAU

268.71

268.64

268.15

267.85

Dollar equivalent @ $1: 6.5540

+$1: 6.5475

$1,275.22

$1,276.16

$1,272.57

$1,272.40

No dominant influences can be read into these gold prices as they are trading in such a tight trading range. What is happening of note is that the dollar is stronger today and the Yuan weaker, while the gold price is acting as an effective measure of all currency values against itself.

The trading pattern of gold is eerily tight and has been this week to date. To us, the longer it moves sideways, the greater the subsequent move, either way.

The dollar index is almost unchanged at 94.83, up from yesterday’s 94.54. The dollar is also slightly stronger against the euro at $1.1275, stronger than Tuesday’s $1.1323.

The gold price in the euro was set at €1,126.47 up from Monday’s €1,121.70.

Ahead of New York’s opening, the gold price was trading at $1,274.15 and in the euro at €1,129.67.  

Silver Today –The silver price closed in New York on Tuesday at $17.23 higher than Monday’s $17.14. Ahead of New York’s opening the silver price stood at $17.07.

Price Drivers

Today saw a very heavy imposition of duties on steel imports to the U.S.A. It’s a game changer!

Take a look at the ‘currency wars’ that have taken place over the last couple of years. Now we see the dollar bull market has ended, to stem the loss of competitive advantage the dollar has. The background psyche is that nations don’t have friends they have interests. Globalization favors the cheap exports which undermine local industry. There is no tactic in exchange rates that can combat that. The only way to stop it is to impose duties of sufficient levels to remove the advantage to importers of cheap products. It is called ‘protectionism’. The steel import duties are a major step down this road. Expect protectionism to grow, globally.

Why is this important to gold and silver? Because it directly affects currencies and their exchangeability! Protectionism is divisive. Such division favors gold and silver.  In turn, this eventually, will affect global currency liquidity. This brings back the importance of gold as a global trade facilitator.

Gold ETFs – Tuesday saw purchases of 4.754 tonnes of gold bought into the SPDR gold ETF or the Gold Trust. This leaves their holdings at 855.886 and 198.38 tonnes in the SPDR & Gold Trust, respectively.  

Once again this is a large amount in a day, but once again COMEX and foreign exchange rates rule the day.

Silver –The Silver price continues to hold around $17.00 waiting for gold to move. Gold:silver ratio has risen to nearly 75 again

Julian D.W. Phillips

GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance

Gold and Silver steady ahead of a move

Gold TodayGold closed in New York at $1,277.30 yesterday down from $1,279.20 on Wednesday. On Friday morning in Asia it rose slightly to $1,279.10, as the Yuan continued to weaken against a slightly stronger dollar, before the LBMA price setting in London.

LBMA price setting:  $1,280.25 up from Thursday’s $1,275.75.

Yuan Gold Fix

Trade Date Contract Benchmark Price AM Benchmark Price PM
2016  05  6

2016  04  5

SHAU

SHAU

267.79

267.79

267.52

268.02

Dollar equivalent @ $1: 6.5177

$1: 6.5077

$1,277.94

$1,281.12

$1,276.65

$1,281.00

The Shanghai Gold Fixings today were around the close in New York, but New York barely moved the gold price during yesterday, nor did London.  

In all main global gold markets the gold price has settled around the $1,277- $1,280 area a feature that usually precedes a hefty move in the gold price.

All ‘hard’ currencies are relatively steady together and, by extension, against the gold price.

The dollar index is the same today as yesterday, at 93.60. The dollar is barely stronger against the euro at $1.1426 from Thursday’s $1.1431.

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

Ahead of New York’s opening, the gold price was trading at $1,280.40 and in the euro at €1,120.75.  

Silver Today –The silver price closed in New York on Wednesday lower at $17.34 the same as yesterday. Ahead of New York’s opening the silver price stood at $17.34.

Price Drivers

The center of attention today is the jobs numbers from the Fed just after the opening in New York. A figure of 200,000 has been priced in so any deviation from that will be seen in the dollar and in gold prices in the dollar, in particular.

Japan – While Mr. Abe has now made it clear that he will use the G-7 meeting to drum up support for acceptance of policies that directly weaken the Yen, contrary to their agreement not to manipulated currencies for international trade competitive reasons.  

Globally equity markets continue to slide as fears of global growth slipping, increase. Gradually Mr. Draghi’s words, to Germany, calling for structural reform by governments, are being seen as necessary, across the world. Monetary policy has shot its bolt and has few tools left to achieve more than it has.  It is time for government to step in and actively promote growth through fiscal policy. As to whether they can, is a question that may still not be answered! One professional comment today was that the global economy is soon, ‘to sink below the icy waves.’ Against this backdrop gold is becoming more and more attractive.

We will be watching the growth of wages in the U.S., as reported by the Fed.

Gold ETFs – Thursday saw purchases of 3.903 of a tonne of gold bought into the SPDR gold ETF and another 0.6 of a tonne bought into the Gold Trust. This leaves their holdings at 829.44 and 195.38 tonnes in the SPDR & Gold Trust, respectively.  

The purchases of yesterday and the day before, appear to have been made on the basis that the next move in gold is higher. These were around 10 tonnes!

Silver – The Silver price is now stable and ready to move. As we said again yesterday, silver, “may well rise much faster soon, as gold recovers and then we expect to see a ‘shunt’ effect on the silver price.”

Julian D.W. Phillips

GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance

Gold and silver prices – looking good to go 

Gold TodayGold closed in New York at $1,268.10 up from $1,247.30 on Thursday. On Friday morning in Asia it rose to $1,275, as the dollar continued to weaken and before the LBMA price setting.

LBMA price setting:  $1,274.50 up from Wednesday’s $1,256.60.

Yuan Gold Fix

Trade Date Contract Benchmark Price AM Benchmark Price PM
2016  04  29

2016  04  28

SHAU

SHAU

265.25

260.04

265.54

261.88

Dollar equivalent @ $1: 6.4923

$1: 6.4798

$1,270.77

$1,248.21

$1,272.11

$1,257.04

The Shanghai Gold Fixings today show a real rise in the price of physical gold as the number of the Yuan in dollars rose [weakened] so currency moves were not a factor today. The rise in the gold price has held in London ahead of the LBMA gold price setting.

With China ahead of most of the developed world in time, to see the Yuan gold Fixings ahead of London and New York, leaves China leading the way, not New York leading Shanghai. If this continues, we will see pricing power over gold fall into Shanghai hands, it being the first to respond both to physical demand and to currency moves.

The dollar index is lower today, at 93.88 down from Thursday’s 93.88. The dollar is weaker against the euro at $1.1400 from Thursday’s $1.1345.

The gold price in the euro was set at €1,118.18 up from Thursday’s €1,100.19.

Ahead of New York’s opening, the gold price was trading at $1,278.40 and in the euro at €1,121.40.  

Silver Today –The silver price closed in New York higher at $17.60 on Thursday up from Wednesday’s $17.28. Ahead of New York’s opening the silver price stood at $17.79.

Price Drivers

Today we are seeing gold rise in all currencies, reflecting the fundamental weakening of the dollar and demand for physical gold globally, as seen in rising New York, Shanghai and London prices. The Technical picture for both gold and silver looks positive. The gold price needs to confirm it has broken through $1,270 convincingly, which it appears to be doing right now.

The drop in U.S. GDP to 0.5% annual rate, in the first quarter, in the U.S., helped the dollar to continue falling and brought into question just how sustainable labor growth numbers are. This was a serious slowdown and should be noted as such. Business slashed investment by the steepest amount since the Great Recession. While the media hopes that these numbers can be adjusted to look better and that the rest of the year will see a better performance, hope is not reality.

For gold and silver investors, these numbers emphasize the reality of the falling dollar and the Fed and Treasury’s desire to see a weaker dollar. Make no mistake a weaker dollar will help the U.S. just as much as it will hurt those nations trying to weaken their currencies. This is very gold and silver positive.

We are entering a structural change in the currency world because the U.S. dollar is the pivot of the currency world. Other nations can’t afford to lose international competitiveness and soon will respond by even more action to weaken their currency. We expect the ‘race to the bottom’ to see a gear shift in velocity.

China has begun constructing its Yuan as an alternative pivot in the currency world.

Gold ETFs – Yesterday saw purchases of 1.486 tonnes of gold into the SPDR gold ETF but no change in the Gold Trust. This leaves their holdings at 804.14 and 187.56 tonnes in the SPDR & Gold Trust, respectively.  

Silver – The Technical picture of the silver price looks good and we expect it to outperform gold in the near future.

 

Julian D.W. Phillips

GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance

 

Waiting for Yellen! Gold and Silver Marking Time

Gold TodayGold closed in New York at $1,239.40 up from $1,233.70 on Monday. On Tuesday morning in Asia and Europe it fell back to $1,233, before the LBMA price setting.

LBMA price setting:  $1,234.50 up from Monday’s $1,230.85.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM Benchmark Price PM
2016  04  26

2016  04  25

SHAU

SHAU

259.23

258.42

258.53

258.80

Dollar equivalent @ $1: 6.4942

$1: 6.4945

$1,241.56

$1,237.63

$1,238.21

$1,239.44

The dollar index is lower today, at 94.58 down from Monday’s 94.80. The dollar is barely changed against the euro at $1.1283 from Monday’s $1.1256.

The gold price in the euro was set at €1,094.12 down from Monday’s €1,093.51.

Ahead of New York’s opening, the gold price was trading at $1,233.05 and in the euro at €1,092.84.  

Silver Today –The silver price closed in New York slightly lower at S17.05 on Monday almost unchanged on Friday’s $17.03. Ahead of New York’s opening the silver price stood at $16.89.

Price Drivers

Today, the FOMC meets with little prospect if any, of a rate rise. The focus is on the statement that comes out of the meeting tomorrow. What we all are fully aware of is that the Fed does not want to see a stronger dollar. Indeed it would prefer to see a weaker dollar. Currently the policies of the E.U. and Japan, no matter what they say are designed to weaken their respective currencies.

We are expecting Mrs. Yellen to mention the Fed’s concerns about overseas factors that make the U.S. economy vulnerable to outside influences just as she did after the last meeting. These not only include China but the E.U. and Japan.

Of additional concern is yet another warning from the IMF pointing out that global risks are on the rise. Governments across the developed world are not boosting economies as they should be so the IMF is correct when they say that monetary policy can only do so much. Monetary policies were not designed to create growth and yet we have been helped to focus only on their efforts and almost ignoring the failure of government to do their job.

It’s like watching a man fall out of a 50-story building and hearing spectators saying as he passes each floor, “so far, so good!”

Needless to say, this is all positive for gold and silver prices.

Gold ETFs – Yesterday saw sales of 2.378 tonnes of gold from the SPDR gold ETF but no sales or purchases from or into the Gold Trust. This leaves their holdings at 802.654 and 187.56 tonnes in the SPDR & Gold Trust respectively.  These sales were sufficient to let dealers drop prices leaving the gold price at the bottom of its trading range.

Silver – The silver price is continuing to mark time at just below $17.00 while gold is lower.

Julian D.W. Phillips

GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance

Gold and silver market morning: Entering best time of year for gold demand

New York closed at $1,141.50 on Friday down from $1,145.80 on Thursday. It held that level in Asia before London opened. The LBMA price setting fixed it at $1,135.80 down from $1,147.75 on Friday. The dollar Index has risen and now stands at 96.80 down from 97.11 on Friday. The dollar was weakening this morning as London opened, trading against the euro at $1.1025 down from $1.0993.  In the euro the fixing was €1,030.20 down from €1,041.75.  At New York’s opening gold was trading in the euro at €1,032.87 and at $1,137.60.  

The silver price closed at $15.52 down 8 cents on Friday. At New York’s opening, silver was trading at $15.42.

Price Drivers

Friday saw sales from the SPDR gold ETF of 2.084 tonnes and of 0.66 of a tonne from the Gold Trust leaving their holdings at 692.60 tonnes and at 161.33 in the Gold Trust. In quiet trade this may have accelerated the fall of the gold price in both the dollar and the euro.

After rising to €1,050, the gold price has pulled back to €1,030, but still well above the below-€1,000 seen a month ago. Nevertheless, Friday continued to see support damaged with gold falling through that level. The Technicals are now in no-man’s land, below $1,060 and yet above $1,130. The downside risk appears limited unless gold falls through $1,130.

We have now entered the best time for gold demand in the last two months of 2015 and the first three months of 2016.

But the huge changes now expected come out of China with an announcement expected this month on China’s Yuan becoming one of the currencies that make up the Special Drawing Right of the I.M.F. While this may not be implemented until late 2016 it would be a major step forward for the Renminbi. Likely soon thereafter, we expect an announcement on the establishment of a Shanghai Gold Fix in the Yuan. This unleashes a structural change in the monetary system and the gold markets. We may not see an immediate change in these markets, but overtime will see just how important they are.

Silver prices are reflecting $ gold price moves despite the different market structure, as always. It demonstrates well the disjoint from fundamental conditions in that market.

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