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

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China’s SGE revises gold withdrawals lower

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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 

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 Sf1,249.35 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

Largish sale from GLD but gold price still consolidating

 Gold Today –New York closed at $1,281.20 yesterday after closing at $1,279.20 Wednesday. London opened at $1,281.00 today. 

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

         The $: € was stronger at $1.0695 after yesterday’s $1.0766: €1.

         The Dollar index was stronger at 99.94 after yesterday’s 99.46

         The Yen was weaker at 109.18 after yesterday’s 109.03:$1. 

         The Yuan was weaker at 6.8867 after yesterday’s 6.8837: $1. 

         The Pound Sterling was weaker at $1.2787 after yesterday’s $1.2833: £1.

Yuan Gold Fix
Trade Date Contract Benchmark Price AM 1 gm Benchmark Price PM 1 gm
      2017    4    21

     2017    4    20

     2017    4    19    

SHAU

SHAU

SHAU

/

285.30

286.11

/

285.23

285.75

$ equivalent 1oz @    $1: 6.8867

       $1: 6.8837

       $1: 6.8854

      

  /

$1,289.11

$1,292.45

/

$1,288.79

$1,290.8

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 285.10 towards the close today. This translates into $1,282.64.

All three global gold markets are in line with each other. At this moment in time, we don’t see that the three are leading or following each other, but the closeness of prices tells us that arbitrageurs are doing a very professional job of smoothing out the gold markets across the world. New York closed $1.44 below Shanghai’s closing yesterday and today. London opened at a $1.46 discount to Shanghai in line with New York. This is the closest we have ever seen them.

LBMA price setting:  The LBMA a.m. gold price was set today at $1,281.50 from yesterday’s $1,279.90.  

The gold price in the euro was set at €1,198.00 after yesterday’s €1,191.05.

Ahead of the opening of New York the gold price was trading at $1,284.15 and in the euro at €1,200.59. At the same time, the silver price was trading at $17.99. 

Silver Today –Silver closed at $18.01 yesterday after $18.14 at New York’s close Wednesday.

 Price Drivers

The dollar is recovering against other currencies today with gold rising in the dollar. Technically gold is sitting on support, while still consolidating.

France

With the French elections taking place this weekend, after another terror attack the mood in the world remains dark. The French polls are reminding us of the polls before the U.S. election, so we do not rate their abilities too highly. There is always a danger that we get so used to the dark side of the world that it becomes a ‘new normal’ but we do expect such attacks [in Paris today] to affect voters in France. Next week could see two euro-skeptics in the run-off for the Presidency.

Expectations too high

Currency markets are behaving in an unpredictable fashion at the moment as are markets.

Equity markets are too high and not for the right reasons as the U.S. recovery is still moderate and not such that gives rise to the current record highs we are seeing. Likewise in Europe with its tentative recovery. The IMF has increased its forecasts for the coming years. We would like to see more reasons and sustainability before endorsing such opinions. There are too many potential events that could disturb such a positive picture. What we do draw from the global scene is that the environment remains positive for gold.

China

When we see China reporting an increasingly robust economy we see a nation that is doing its best to be a separately, self-sustaining economy with supplies coming from countries not under U.S. influence. We do not see the U.S. and China working interdependently with each other in the future. China will walk its own road.

Russia

Russia continues to publicize the gold it buys, with last month’s purchases just below 25 tonnes. We do believe that China continues to build up its reserves in its institutions and through its agencies, but for whatever reason, has decided not to be open about this.

Gold ETFs

Yesterday saw sales of 6.513 tonnes from the SPDR gold ETF but no change in the Gold Trust. Their holdings are now at 854.25 tonnes and at 204.36 tonnes respectively.

Since January 6th 2017 47.20 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 jumps on US missile strike

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

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

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

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

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

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

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

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

     2017    4      6

     2017    4      5    

SHAU

SHAU

SHAU

/

280.38

280.13

/

280.42

280.13

$ equivalent 1oz @    $1: 6.8992

       $1: 6.8995

       $1: 6.8892

      

  /

$1,263.97

$1,264.24

/

$1,264.15

$1,264.28

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

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

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

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

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

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

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

Price Drivers

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

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

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

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

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

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

Julian D.W. Phillips 

 GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance 

Gold holding higher levels. Set for a further rise?

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

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

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

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

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

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

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

Yuan Gold Fix

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

     2017    3    27       2017    3    24

    2017     3   23

SHAU

SHAU

SHAU

SHAU

/

280.04

277.99

277.93

/

280.61

277.94

278.38

$ equivalent 1oz @    $1: 6.8804

      $1: 6.8758

      $1: 6.8877

 $1: 6.8860

  /

$1,266.79

$1,255.35

$1,255.39

/

$1,267.18

$1,257.12

$1,257.42

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

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

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

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

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

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

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

Price Drivers

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

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

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

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

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

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

 Julian D.W. Phillips 

 GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance

Shanghai now the world’s gold hub

 

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

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

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

         The Dollar index was weaker at 99.77 from 100.06 yesterday. 

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

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

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

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

     2017    3    21       2017    3    20

SHAU

SHAU

SHAU

/

275.97

276.75

/

275.98

276.93

$ equivalent 1oz @  $1: 6.8845

      $1: 6.8968

$1: 6.9051

  /

$1,244.58

$1,246.60

/

$1,244.62

$1,247.41

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

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

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

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

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

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

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

Price Drivers

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

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

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

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

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

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

 

3.85 tonne withdrawal from GLD has little gold pricing effect

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

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

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

         The Dollar index was weaker at 100.06 from 100.16 yesterday. 

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

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

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

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

     2017    3    20       2017    3    17

SHAU

SHAU

SHAU

/

276.75

275.49

/

276.93

275.78

$ equivalent 1oz @  $1: 6.8968

      $1: 6.9051

$1: 6.9068

  /

$1,246.60

$1,240.62

/

$1,247.41

$1,241.92

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

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

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

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

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

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

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

Price Drivers

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

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

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

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

Gold soars post-Fed. Dollar falls back

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

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

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

         The Dollar index was weaker at 100.72 from 101.58 yesterday. 

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

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

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

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

     2017    3    15       2017    3    14

SHAU

SHAU

SHAU

/

270.98

272.05

/

271.58

271.47

$ equivalent 1oz @  $1: 6.8967

      $1: 6.9124

$1: 6.9137

  /

$1,219.32

$1,223.90

/

$1,222.02

$1,221.29

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

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

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

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

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

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

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

 Price Drivers

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

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

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

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

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

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