Silver Market Morning: Nov-24-2016 -- Gold and Silver break down through support!
Gold Today –New York closed at $1,188.60 yesterday after the previous close of $1,212.00 London opened at $1,185.45.
Overall the dollar was much stronger against global currencies except sterling.
- The $: € was stronger at $1.0526: €1 from $1.0603: €1 yesterday.
- The Dollar index was a weaker at 101.95 from 101.20 yesterday.
- The Yen was weaker at 113.15: $1 from yesterday’s 111.06 against the dollar.
- The Yuan was weaker at 6.9278: $1 from 6.9055: $1 yesterday.
- The Pound Sterling was stronger at $1.2454: £1 from yesterday’s $1.2380: £1.
Yuan Gold Fix
Benchmark Price AM 1 gm
Benchmark Price PM 1 gm
2016 11 24
2016 11 23
2016 11 22
$ equivalent 1 oz @ $1: 6.9278
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.]
Gold prices in Shanghai are $18 higher than New York’s close and $22 higher than London’s opening [allowing for the difference in the quality of gold priced in the different markets]. This demonstrates just how strong demand in China really is. What has to be seen in a physical gold market is the direct impact on the gold price physical demand and supply has. In a COMEX type market prices are much more volatile and easily moved by algorithm trading, just because no physical metal is involved. Inevitably physical gold will move to the market paying the most.
The dollar is kicking higher today in what we believe is a retreat by the ‘carry trade’ running from the change in differentials in interest rates. With 100% certainty markets are factoring in a 0.25 basis point rate hike. While this does not seem much, the selling of foreign currencies and buying of the dollar is destroying all profits achieve by the interest rate differentials.
LBMA price setting: The LBMA gold price setting was at $1,187.25 against yesterday’s $1,213.25. The gold price in the euro was set higher at €1,122.70 against yesterday’s €1,141.45.
Ahead of the opening of New York the gold price was trading at $1,186.75 and in the euro at €1,123.60. At the same time, the silver price was trading at $16.31.
Silver Today –Silver fell to $16.35 at New York’s close yesterday from $16.66, Wednesday.
Gold (very short-term) The gold price will look for a bottom in volatile trade, in New York today.
Silver (very short-term) The silver price will look for a bottom in volatile trade, in New York today.
The classic ‘bear raid’ is to set up a massive short position on the Futures and Options market on COMEX, before you sell physical gold. With gold on support as it was yesterday the opportunity presented itself and a massive physical gold sale broke the gold price down, making big profits on COMEX.
But that physical gold sold will find its way to Shanghai no doubt where the arbitrage opportunity was excellent and likely just as profitable. Shanghai and the east are once again milking the physical gold from the west.
Turning to the long-term view, we see the rise of the dollar as being short term, as we do the fall in the gold price. One of the reasons for the rise in the gold price of around 30% was the reduced supply of physical gold availability. The east had taken this to Shanghai. The same is happening now, as we see the east take gold supply off the market from U.S. sellers. When western buyers return in bulk to the gold market, which they will, they will find the same situation causing an even greater rise in the gold price then.
India – The rumors of a ban on the imports of gold into India are flying around that country. Could it happen? In the 1970’ it did happen and certainly made impossible to produce figures of gold imports thereafter, with any accuracy. Nevertheless, boats came out from the north western coast of India and from the east coast and met boats that came down from Dubai and from nations north and east of India, where gold was swapped for silver. If gold imports are banned, we see the smuggled gold numbers burgeoning. It is our guesstimate that between 25% and 40% of the gold entering India at the moment is smuggled gaining the duties and taxes on imported gold as well as the premium over the legal gold price. In the event of a ban we see this percentage rising to 100%, with volumes of gold brought in not much lower than the current +1,000 – 1,200 tonnes of ‘official’ and smuggled gold annually, at present. But at first, such a ban would bring down the price of gold but not for long as smugglers increased their turnover. [We will discuss this in future issues of the Gold Forecaster for subscribers!] - Subscribe - GoldForecaster.com - 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 email@example.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!
Gold ETFs – There were sales of 13.343 tonnes of gold from the SPDR gold ETF and sales of 0.54 of a tonne from the Gold Trust yesterday, leaving their respective holdings at 891.567 tonnes and 205.24 tonnes. The selling in the U.S. based gold ETFs was massive, seemingly designed to break the gold price down through support, as such a sale at a critical support level was not to secure profits [or it would have been sold out over a longer period] but to break the price.
Since January 4th this year, 295.798 tonnes of gold has been added to the SPDR gold ETF and to the Gold Trust. The fall in the holdings of the two gold ETF’s is around 100 tonnes since the election of Trump.
Silver –Silver is retreating with gold now but not as fast. If gold’s fall continues, silver will accelerate its fall.
Julian D.W. Phillips
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