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Silver Market Morning: Jan 4 2017 - Gold and Silver see a shift in sentiment!

Julian D. W. Phillips
|
Wednesday, January 4th

Gold Today New York closed at $1,159.50 on the 3rd January after closing at $1,151.70 on the 30th December. London opened again at $1,166.30 today.

 

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

 - The $: € was weaker at $1.0441: €1 from $1.0310: €1 yesterday.

- The Dollar index was weaker at 102.98 from 103.09 yesterday.

- The Yen was stronger at 117.56: $1 from yesterday’s 117.92 against the dollar.

- The Yuan was stronger at 6.9321: $1, from 6.9566: $1, yesterday.

- The Pound Sterling was slightly weaker at $1.2270: £1 from yesterday’s $1.2280: £1.

 

Yuan Gold Fix

Trade Date

Contract

Benchmark Price AM 1 gm

Benchmark Price PM 1 gm

2017 1 4

2016 1 3

2016 12 30

SHAU

SHAU

SHAU

/

264.34

264.16

/

264.30

264.70

$ equivalent 1oz @ $1: 6.9321

$1: 6.9566

$1: 6.9340

 

/

$1,181.88

$1,184.93

/

$1,181.70

$1,187.35

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

 

As you can see from the above figures [yesterday’s not today’s, as today are only released tomorrow] the discount to Shanghai’s prices is narrowing. Shanghai prices continue to rise showing good demand, but London and New York’s prices are rising faster, despite strong sales from gold ETFs. Against New York’s prices Shanghai was trading $16.38 higher, but against London Shanghai was trading only $10.40 higher. The change in sentiment in the global gold markets is now evidenced by these rising prices.

 

LBMA price setting: The LBMA gold price setting was at $1,165.90 this morning against yesterday’s $1,148.65.

 

The gold price in the euro was set higher at €1,117.51 after yesterday’s €1,106.01.

 

Ahead of the opening of New York the gold price was trading at $1,165.15 and in the euro at €1,117.22. At the same time, the silver price was trading at $.16.42

 

Silver Today –Silver closed at $16.29 at New York’s close yesterday from $16.21 on the 30th December.

 

Gold (very short-term) The gold price will consolidate with a positive bias, in New York today.

 

Silver (very short-term) The silver price will consolidate with a positive bias, in New York today.

 

Price Drivers

With a weaker dollar today, gold has jumped in the dollar but even more so in the euro. But what is remarkable is that there was a huge sale of gold from the SPDR gold ETF, which did not move the gold price down. Instead the gold price rose and more so than appeared justified by the fall in the dollar. We can attribute this to the ongoing pull of Chinese prices and demand in Shanghai. The fact that gold prices went higher in London tells us that the gold sold from the SPDR gold ETF was not sold into London this morning, indicating it is on its way to Shanghai.

 

It does look like gold prices are no longer headed lower so we do expect a more vigorous response in the gold price as the market is overhung with huge short positions in the Futures and Options markets. Any return of U.S. buyers of the shares in the SPDR gold ETF will act as an accelerant to this rise.

 

Gold ETFs – Yesterday in New York, there were sales of 8.299 tonnes from the SPDR gold ETF but no change in the holdings of the Gold Trust, leaving their respective holdings at 813.871 tonnes and 196.20 tonnes. This was a significant tonnage unloaded onto the market and should have knocked the price down. As the Custodian HSBC is the one who either takes this amount onto its books, or usually sells it into London, we did not see any impact on London’s prices.

 

Since January 4th this year, 209.601 tonnes of gold has been added to the SPDR gold ETF and to the Gold Trust. We are almost at half the level accumulated in 2016.

 

Regards,

 

Julian D.W. Phillips

 

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Global Gold Price (1 ounce)

 

Today

yesterday

Franc

Sf1,196.20

Sf1,180.85

US

$1,165.15

$1,159.00

EU

€1,117.22

€1,098.32

India

Rs.79,356.04

Rs. 78,719.78

China

Y 8,080.43

Y 8,048.10

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