Gold price technical trend still bullish despite fall

Gold Today –New York closed at $1,279.50 yesterday after closing at $1,293.20 Wednesday. London opened at $1,275.00 today. 

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

         The $: € was stronger at $1.1178 after yesterday’s $1.1232: €1.

         The Dollar index was stronger at 97.44 after yesterday’s 96.89

         The Yen was weaker at 110.37 after yesterday’s 110.07:$1. 

         The Yuan was slightly weaker at 6.7988 after yesterday’s 6.7954: $1. 

         The Pound Sterling was much weaker at $1.2720 after yesterday’s $1.2941: £1.

Yuan Gold Fix
Trade Date     Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    6    9

     2017    6    8

     2017    6    7

SHAU

SHAU

SHAU

 

 

282.78

283.66

 

Trading at 280.00

283.13

283.67

 

$ equivalent 1oz at 0.995 fineness

@    $1: 6.7988

       $1: 6.7954

       $1: 6.7931     

 

   

 

$1,289.32

$1,293.79

 

Trading at $1,275.96

$1,290.92

$1,293.84

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 and Shanghai stayed at the same level yesterday and this morning. New York led the way down and Shanghai took it down further. London opened at the same level as Shanghai. The global gold markets continue to move together.

Silver Today –Silver closed at $17.41 yesterday after $17.69 at New York’s close Wednesday.

LBMA price setting:  The LBMA gold price was set this morning at $1,274.25 from yesterday’s $1,284.80.  The gold price in the euro was set at €1,139.76 after yesterday’s €1,143.37.

Ahead of the opening of New York the gold price was trading at $1,273.75 and in the euro at €1,147.52. At the same time, the silver price was trading at $17.34. 

Price Drivers

Technical picture

The pullback in the gold price is a correction that has not altered the trend. This remains to the upside.  A weaker euro has led to higher prices for gold in the euro and lower prices in the dollar. This shows a recovering dollar is the main reason for gold’s fall at the moment.

Over the last day global uncertainty has increased due to issues on both sides of the Atlantic and in the Middle East.

Middle East

In the Middle east tensions there continue to rise as actions are taken against Qatar. It is clear that this is not simply political issues between the Persian Gulf nations but between the two sides of Islam. These cannot be solved by simple diplomacy. We can’t see a solution to these or to terror itself. At best, the police in different countries may be able to contain it, but with wars smashing on in different parts of the Middle East over the religious issues, we cannot see an end of them at all.

British Elections have turned out to be disaster for Prime Minister May as we see a hung Parliament. As a result we expect to see more easing and perhaps a rate cut in the near future as uncertainty kicks into the way forward for Brexit. Most believed that the only issue was the size of the conservative majority. But this result changes things. Already the gold price is rising in the pound sterling, as the pound falls heavily.

This is a year of considerable surprises.  We now look to Italy for the next surprise.

The Dollar

The dollar is stronger today as it consolidates. This is the prime reason the gold price has fallen in the dollar. It has risen in other currencies.

With gold ETF purchases continuing in the U.S. uncertainty surrounding the way forward under President Trump increases. The resulting slowing of his agenda continues to provide a backdrop for gold to rise, but the markets see in Comey’s testimony, no reason to fall. It does appear so far that there are no grounds for impeachment of the President, but his agenda does seem to be mired in controversy.

Gold ETFs – Yesterday, saw purchases of 2.071 tonnes of gold and with the last two days before this the total purchases of the last three days is 17.005 tonnes of gold bought into the two gold ETFs, in the last three days. Yesterday saw 0.6 of a tonne bought into the Gold Trust.  Their holdings are now at 866.998 tonnes and, at 206.16 tonnes respectively.

U.S. buyers continue strong buyers of physical gold now. Today we may see a pause in their buying as the gold price consolidates at lower levels.

Since January 6th 2017 61.364 tonnes have been added to the SPDR gold ETF and the Gold Trust.

Julian D.W. Phillips 

 GoldForecaster.com | StockBridge Management Alliance 

Sharp markdown in gold price as European and US tensions ease

 Gold Today –New York closed at $1,293.20 yesterday after closing at $1,293.80 Tuesday. London opened at $1,284.00 today. 

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

         The $: € was slightly stronger at $1.1232 after yesterday’s $1.1254: €1.

         The Dollar index was stronger at 96.89 after yesterday’s 96.73

         The Yen was weaker at 110.07 after yesterday’s 109.30:$1. 

         The Yuan was slightly weaker at 6.7954 after yesterday’s 6.7931: $1. 

         The Pound Sterling was stronger at $1.2941 after yesterday’s $1.2898: £1.

Yuan Gold Fix
Trade Date     Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    6    8

     2017    6    7

     2017    6    6

SHAU

SHAU

SHAU

 

 

283.66

282.37

 

Trading at 283.50

283.67

282.97

 

$ equivalent 1oz at 0.995 fineness

@    $1: 6.7954

       $1: 6.7931

       $1: 6.7954     

 

   

 

$1,293.79

$1,287.45

 

Trading at $1,292.62

$1,293.84

$1,290.19

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 and Shanghai stayed at the same level yesterday and this morning. London opened $9.20 lower. We see London preparing for sales of gold by marking prices down ahead of trading. With the geo-political and financial events taking place today in the U.K. and E.U  the market is pausing waiting for clarity going forward.

Silver Today –Silver closed at $17.62 yesterday after $17.69 at New York’s close Tuesday.

LBMA price setting:  The LBMA gold price was set today at $1,284.80 from yesterday’s $1,292.70.  The gold price in the euro was set at €1,143.37 after yesterday’s €1,151.01.

Ahead of the opening of New York the gold price was trading at $1,284.75 and in the euro at €1,143.17. At the same time, the silver price was trading at $17.63. 

Price Drivers

British Elections happen today. As we said yesterday, “With the discussions around the size of the conservative majority it appears to us that the result will not affect the gold price.”

Draghi and the E.U.

Growth in the Eurozone is now clearly evident, but inflation is falling. As we said yesterday, Draghi, who has repeatedly said that policy makers must be convinced that inflation can rise toward 2% on its own, before removing monetary stimulus, may well make a point of this, but will, it seems only change his language in the statement slightly confirming this. This is positive for gold.

The Dollar

We do expect the euro to continue getting stronger against the U.S. dollar. Today the $ index is consolidating.

Today the indications are that Japan is moving towards ending their stimulus program. Whether this is because they deem it is no longer working or whether they have  beaten back deflation is yet to be confirmed. Certainly falling and low inflation world-wide is indicating such battles have not been won.

Comey Testimony

Former FBI Director James Comey is to testify today on whether President Trump tried to interfere with FBI investigation into possible links between then Security Adviser  Michael Flynn and Russia.  Consensus was that Comey would not say anything too damaging to the Trump Administration and this consensus was a partial contributor to a sharp markdown in the gold price, along with profit taking and the stronger dollar. (Editor)

Gold ETFs – Yesterday, saw purchases of 9.764 tonnes of gold and with yesterday’s 4.61 tonnes of gold bought into the SPDR gold ETF, we have seen 14.93 tonnes of physical gold bought into U.S. based gold ETFs in the last two days. We saw 0.56 of a tonne bought into the Gold Trust. Their holdings are now at 864.927 tonnes and, at 205.56 tonnes respectively.

U.S. buyers are strong buyers of physical gold now although this may not continue if today’s gold price downturn lasts.

Since January 6th 2017 58.693 tonnes have been added to the SPDR gold ETF and the Gold Trust. This is an approximately 30% increase in the last two days!

 Julian D.W. Phillips 

 GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance 

 

Gold pausing before tackling $1,300

Gold Today –New York closed at $1,293.80 yesterday after closing at $1,279.60 Monday. London opened at $1,292.65 today. 

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

         The $: € was slightly weaker at $1.1254 after yesterday’s $1.1246: €1.

         The Dollar index was slightly weaker at 96.68 after yesterday’s 96.73

         The Yen was stronger at 109.30 after yesterday’s 109.52:$1. 

         The Yuan was stronger at 6.7931 after yesterday’s 6.7954: $1. 

         The Pound Sterling was slightly weaker at $1.2898 after yesterday’s $1.2904: £1.

Yuan Gold Fix
Trade Date     Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    6    7

     2017    6    6

     2017    6    5

SHAU

SHAU

SHAU

 

 

282.37

281.27

 

Trading at 283.60

282.97

281.35

 

$ equivalent 1oz at 0.995 fineness

@    $1: 6.7931

       $1: 6.7954

       $1: 6.8036     

 

   

 

$1,287.45

$1,280.86

 

Trading at $1,293.52

$1,290.19

$1,281.55

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 rose to the same level as Shanghai yesterday. Today, Shanghai is pausing at the same level. London opened at almost the same level as Shanghai.

Once again we see all three centers with gold prices at the same level. This is only the second time this has happened. The first was in the last month.

Silver Today –Silver closed at $17.69 yesterday after $17.57 at New York’s close Monday.

LBMA price setting:  The LBMA gold price was set this morning at $1,292.70 from yesterday’s $1,287.85.  The gold price in the euro was set at €1,151.01 after yesterday’s €1,144.40.

Ahead of the opening of New York the gold price was trading at $1,291.75 and in the euro at €1,150.37. At the same time, the silver price was trading at $17.67. 

Price Drivers

British Elections happen tomorrow. With the discussions around the size of the conservative majority it appears to us that the result will not affect the gold price.

Draghi and the E.U.

With inflation falling in the E.U. problems in the banking sector [Banco Popular has just been taken over by Santander in Spain]  Draghi, who has repeatedly said that policy makers must be convinced that inflation can rise toward 2% on its own, before removing monetary stimulus, is set to leave the current stimulus position in place through the rest of this year. This is positive for gold.

The Dollar

As you can see above, the dollar index continues to slip to a point where, if it falls to the lower 95 levels, it enters a bear market.  This is the main influence on the gold price, not the short term political news.

But this does not simply mean a falling dollar, it points to disruption in the global monetary system as all the globe’s currencies will be affected. It points to the proximity of a move from a dollar hegemony system to a multi-currency system. Within these changes lies a growing relevance of gold.

The environment globally, continues to be positive for gold.

Gold ETFs – Yesterday, saw purchases of 4.61 tonnes of gold into the SPDR gold ETF, but no change in the holdings of the Gold Trust. Their holdings are now at 855.163 tonnes and, at 205 tonnes respectively.

Since January 6th 2017 48.369 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 poised to attack $1,300

Gold Today –New York closed at $1,279.60 yesterday after closing at $1,278.20 Friday. London opened at $1,289.50 today. 

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

         The $: € was slightly stronger at $1.1246 after yesterday’s $1.1264: €1.

         The Dollar index was slightly weaker at 96.73 after yesterday’s 96.77

         The Yen was stronger at 109.52 after yesterday’s 110.51:$1. 

         The Yuan was stronger at 6.7954 after yesterday’s 6.8036: $1. 

         The Pound Sterling was barely changed at $1.2904 after yesterday’s $1.2905: £1.

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

     2017    6    5

     2017    6    2

SHAU

SHAU

SHAU

 

 

281.27

278.34

 

Trading at 283.60

281.35

277.96

 

$ equivalent 1oz at 0.995 fineness

@    $1: 6.7954

       $1: 6.8036

       $1: 6.8153     

 

   

 

$1,280.86

$1,265.28

 

Trading at $1,293.08

$1,281.23

$1,263.55

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 New York saw the gold price rise a little it was Shanghai that gave the spurt to the gold price trading at $1,293 late in their day today. London was pulled up at the opening to just $4 below Shanghai.

Silver Today –Silver closed at $17.57 yesterday after $17.52 at New York’s close Friday.

LBMA price setting:  The LBMA morning gold price was set today at $1,287.85 from yesterday’s $1,280.70.  The gold price in the euro was set at €1,144.40 after yesterday’s €1,137.04.

Ahead of the opening of New York the gold price was trading at $1,294.15 and in the euro at €1,148.62. At the same time, the silver price was trading at $17.73 

Price Drivers

Mainland China is set to import about 1,000 metric tons from Hong Kong in 2017, says, president of the Hong Kong gold exchange. That compares with net purchases of 647 tons last year and would be the biggest since 2013, data from the Hong Kong Census and Statistics Department confirmed.

Local consumption was up 15% in the first quarter, with sales of bars for investment climbing more than 60% and dwarfing a 1.4% rise in jewelry buying, according to data from the China Gold Association.  

Imports from Switzerland topped 100 tons in the first four months of the year, according to calculations on data reported by the Swiss Federal Customs Administration. In December, China imported 158 tons from Switzerland, taking the total for the year to 442 tons, up from 288 tons in 2015.

One has to be guarded about figures from Hong Kong being representative of Chinese demand. Gold enters China from Switzerland but also through Beijing and other ports of entry. In addition, the country mines around 450 + tonnes a year. It also imports gold directly from mines it owns outside the country. So the figures mentioned here are  just part of the picture. What we do learn from these is that Chinese demand is running close to record levels. The government has encouraged this as a matter of policy, so as to build up the nation’s gold. Gold is not allowed to be exported from the country. The volatility of the Stock Exchange there is a discouragement for long term investors and is not regarded as competition for gold, as in most parts of Asia gold is not bought for profit but for financial security.  As the Chinese middle classes burgeon so more and more gold investors arrive in the market. On top of this present middle classes continue to buy more.

India

Ahead of GST, jewelers increased their purchases to replenish inventory, so as to profit from demand for gold after the additional GST was imposed. From a year ago the gold imports surged four-fold to 103 tonnes. Now that the GST rate increase has happened, it is likely that internal gold demand will jump until these extra stockpiles are reduced. We fully expect Indian gold imports to slow until the harvest time is over, round about September.

With the forecasts for the monsoon positive this year and indeed having already started in  some regions, we believe demand later in the year will increase strongly.

Inflation in the E.U. and U.S.

The Federal Reserve’s preferred price measure rose 1.7% in April from a year ago, down from 1.9% in March and 2.1% in February. Core inflation, which strips out volatile oil and food costs, also slowed to the weakest annual pace since 2015. This raises questions about next week’s rate hike.

In the Euro zone, while producer prices rose 4.3% from a year earlier in May, that pressure has yet to flow through to consumer inflation. Euro zone inflation decelerated to 1.4 % in May, the weakest reading this year, from 1.9% a month earlier. We do not expect the E.C.B. to begin slowing their stimulus program until there is a marked change in this figure.

Gold ETFs – Friday, saw no purchases of gold into the SPDR gold ETF, but saw purchases of 0.66 of a tonne of gold into the Gold Trust. Their holdings are now at 851.003 tonnes and, at 205 tonnes respectively.

Since January 6th 2017 43.759 tonnes have been added to the SPDR gold ETF and the Gold Trust.

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

Latest U.S. jobs figure way below expectations. Gold gets sharp boost

Gold Today –New York closed at $1,270.10 yesterday after closing at $1,267.00 yesterday. London opened at $1,262.10 today. 

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

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

         The Dollar index was slightly stronger at 97.20 after yesterday’s 97.17

         The Yen was slightly weaker at 111.51 after yesterday’s 111.15:$1. 

         The Yuan was much weaker at 6.8153 after yesterday’s 6.8062: $1. 

         The Pound Sterling was stronger at $1.2875 after yesterday’s $1.2855: £1.

Yuan Gold Fix
Trade Date     Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    6    2

     2017    5    1

     2017    5    31

SHAU

SHAU

SHAU

 

 

278.93

279.65

 

Trading at 278.70

278.63

278.9

 

$ equivalent 1oz at 0.995 fineness

@    $1: 6.8153

       $1: 6.8062

       $1: 6.8180     

 

   

 

$1,269.67

$1,270.75

 

Trading at $1,266.92

$1,268.30

$1,267.33

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 Yuan is correcting lower, but this does not mean anything as the authorities in Shanghai are continuing their quest to attack speculation and bring stability to the Chinese financial markets.

Shanghai is still drifting lower but the falls are only slight.  We note that Shanghai was trading slightly lower than  New York today.

Silver Today –Silver closed at $17.28 yesterday after $17.32 at New York’s close yesterday.

As the gold price trading range tightens to a breakout point, we look at the silver price which is presenting a different Technical picture. If the gold price falls the silver price will tumble according to the charts. But if gold rises the silver price will follow as usual. But such a rise will change the Technical picture quite dramatically to the upside. Either way the silver price will prove more explosive than the gold price.

LBMA price setting:  The LBMA gold price was set today at $1,260.95 from yesterday’s $1,266.15.  The gold price in the euro was set at €1,121.09 after yesterday’s €1,128.58.

Ahead of the opening of New York the gold price was trading at $1,268.45 and in the euro at €1,125.71. At the same time, the silver price was trading at $17.33. 

Price Drivers

Today, it was London that pulled the gold price back at the price setting. Just ahead of New York’s opening the gold price rose quickly -presumably as news of the latest jobs figures began to surface. We now see Shanghai and New York in line with each other. If Shanghai turns higher with a higher Yuan price of gold tomorrow, we would expect to see prices rise. The gold price itself has already moved above resistance, but needs to hold over $1,275 before resistance is out of the way properly. The longer the gold price continues to consolidate the more significant the subsequent moves will be.

President Trump continues to upset the political world in the U.S.A. and across the globe.  But for gold the inability of the U.S. government to get ‘things done’ is disappointing markets. These remain focused on the June rate hike. Warnings that U.S. equity markets are too high are being ignored and U.S. investment in gold remains absent.  

The Fed – The U.S. jobs numbers out today disappointed to the downside, and the previous two months figures were downgraded sharply too.  These brought the U.S. dollar downwards and added to doubts as to whether the Fed will raise rates at this month’s meeting.  As a result, the gold price moved sharply higher – at least in U.S. dollar terms.  Will this be sustained – we will watch the reaction of investors into the U.S. based gold ETFs to get a clearer picture?

We do not see the U.K elections affecting the gold price. The same is true of the Brexit negotiations until some clear steps are made.  Until U.S. investors return to the gold market, via the US-based gold ETFs we believe the main influence on the gold price will be the steady shifting of gold bullion to China and India, via Swiss refineries. But not until London feels the squeeze on liquidity levels will we see Asian demand driving up the gold price.

Gold ETFs – Yesterday, again, saw no sales or purchases of gold to or from the SPDR gold ETF. Once again 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 

 

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 

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 

Gold drifting with Shanghai closed for another day

Gold Today –New York closed at $1,267.00 yesterday after closing at $1,256.10 Friday. London opened at $1,264.00 today. 

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

         The $: € was stronger at $1.1157 after Friday’s $1.1227: €1.

         The Dollar index was stronger at 97.50 after Friday’s 97.08

         The Yen was slightly stronger at 111.07 after Friday’s 111.10:$1. 

         The Yuan was much stronger at 6.8546 after Friday’s 6.8615: $1. 

         The Pound Sterling was weaker at $1.2859 after yesterday’s $1.2871: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    5    30

     2017    5    25

     2017    5    24

SHAU

SHAU

SHAU

 

 

280.35

279.54

On holiday still

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

On holiday still

$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.]

 While Shanghai is closed we feel it opportune re-make an important point on what is going on with the authorities in China, with reference to overall markets there. China wants to gain a reputation of being a reliable, reputable source of prices. This, in the first place, means reducing the volatility, on a permanent basis, that characterized its markets. Its people have become deeply untrusting of equity markets due to their past extreme volatility.

This policy has taken priority over the freeing up of Capital Controls despite the desire to be a freely floating currency. Once Chinese markets have the reputation, sufficient to attract foreign investors on a comparable basis to the U.S., the Chinese will be able to open up their borders and, hopefully, be attractive to global investors. Dropping Capital Controls before that would make Chinese markets extremely vulnerable.

In the gold market in Shanghai, since the beginning of this year, we have seen the People’s Bank of China attack speculation. By reducing the size and cost of individual contracts, speculation has become extremely expensive. The result of this is a less volatile market. Because Shanghai’s gold prices are exerting a greater and greater influence on the rest of the world’s gold markets, the entire global gold market is becoming far less volatile than the Technical picture would have forecast.   

Silver Today –Silver closed at $17.32 yesterday after $17.16 at New York’s close Friday.

LBMA price setting:  The LBMA morning gold price was set today at $1,262.80 from Friday’s $1,265.00.  The gold price in the euro was set at €1,131.03 after Friday’s €1,130.37.

Ahead of the opening of New York the gold price was trading at $1,260.50 and in the euro at €1,128.87. At the same time, the silver price was trading at $17.27. 

Price Drivers

With China still closed today, the main influence on the gold price has been the moves of the dollar and euro. The dollar is stronger today after the E.C.B.’s Draghi made it clear that despite the lift in the economic picture, they felt that it could be temporary, so it was too early to contemplate any form of tightening of the easy money picture in the E.U. Certainly, the E.U. economy is not served well by a strong euro.

We do expect the euro to be volatile and vulnerable in the next few months as the Italian elections approach, likely in September.

Once Shanghai is open again [tomorrow] we expect to see stronger moves in the gold prices. It is only then that we will be able to see if demand there is strong enough to make it through what’s left of resistance. Meanwhile, the influence of London and New York will be to make the gold price consolidate with a negative bias.

Gold ETFs – Friday, 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 remain at 847.452 tonnes and at 202.82 tonnes respectively.

 

Since January 6th 2017 38.678 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 

SGE revises 2017 gold withdrawals downwards

We had previously noted some anomalies in the reported figures for China’s gold withdrawals from the Shanghai Gold Exchange (SGE) and are pleased to note that a recheck has shown that the monthly and cumulative figures as announced by the SGE have been revised and now tally.  Earlier the announced cumulative total appeared to have been substantially adrift from that suggested by the monyh-by-month reported figures.The principal change is a sharp downwards revision of the gold withdrawal figures for February – a month where figures tend to be somewhat anomalous anyway because of the Chinese New Year holiday.  February figures have been revised downwards sharply from 179.24 tonnes to 148.24 tonnes, while the initially reported April figure of 171.17 tonnes has been adjusted downwards to 165.78 tonnes.  This brings the cumulative total for the year to date to 690.68 tonnes –only marginally higher than at the same time a year ago, and well down on the record 2015 figure.

Table: Revised SGE Monthly Gold Withdrawals (Tonnes)

Month 2017 2016 2015 % change 2016-2017 % change 2015-2017
January 184.41 225.08 255.42 – 18.1%  -27.8%
February* 148.24 107.60 156.36 +37.8% -5.2%
March  192.25 183.24 213.35  +4.9%  -9.9%
April  165.78 171.40 195.45  -3.3%  -15.2%
May   147.28 162.15    
June   138.51 195.67    
July   117.58 285.50    
August   144.44 265.27    
September   170.90 259.98    
October    153.25 176.29    
November    214.72 202.71    
December    196.37 228.21    
Year to date 690.68 687.02 820.58 +0.5% – 15.8%
Full Year    1,970.37 2,596.37    

Source: Shanghai Gold Exchange, Lawrieongold.com

For additional comment click on:

China’s SGE revises gold withdrawals lower

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 

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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