Silver Market Morning: July 5 2017 - Gold stabilizing at lower levels, Silver double bottom?

Gold Today –New York was closed yesterday after closing at $1,222.30 Monday. London opened at $1,223.00 today.

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

 - The $: € was stronger at $1.1356 after yesterday’s $1.1398: €1.

- The Dollar index was slightly stronger at 96.25 after yesterday’s 96.24.

- The Yen was weaker at 113.51 after yesterday’s 113.18:$1.

- The Yuan was stronger at 6.7988 after yesterday’s 6.8025: $1.

- The Pound Sterling was weaker at $1.2908 after yesterday’s $1.2930: £1.

Yuan Gold Fix

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.]

Shanghai followed New York nearly all the way down yesterday closing at only $3 higher than New York’s Monday close. Early in its day, but then turned up and is continuing to rise today. We believe that Shanghai does have the pricing power to turn both London and New York today, but we watch carefully to see it this is so. It is a critical day for the gold price.

We need confirmation of the path of the gold price today as its direction can go either way right now.

Silver Today –Silver closed at $16.08 yesterday [in London] after $16.14 at New York’s close Monday. As with gold, silver is stabilizing at lower levels. As we said yesterday, silver ignores its own fundamentals and will follow gold as a monetary metal, both ways further and faster. We are expecting the silver price to be volatile, but with the present stabilizing, we hope to see a clear direction in the price of gold and silver. The question remains, is silver forming a double bottom?

LBMA price setting: The LBMA gold price was set today at $1,221.90 from yesterday’s $1,224.25. The gold price in the euro was set at €1,079.23 after yesterday’s €1.078.73.

Ahead of the opening of New York the gold price was trading at $1,222.30 and in the euro at €1,078.53. At the same time, the silver price was trading at $16.00.

Gold _{(very short-term)} The gold price should consolidate today and confirm direction, in New York today.

Silver _{(very short-term)} The silver price should consolidate today and confirm direction, in New York today.

Price Drivers

While the gold price has broken down through the ‘Golden Cross’ and the Technical picture does not look so good, there are more than one probabilities for the gold price going forward. Today is critical to pointing the way forward for both the silver and gold prices. Are we looking for a rebound back to the “Golden Cross” then another heavy fall, or has all the work done by the gold price to get above that critical line at $1,250 been for nothing? This is when the fundamentals kick in as well as the behavior of the burgeoning Shanghai Gold Exchange. Gold and silver could go either way today!

As we said yesterday, “…. With currency volatility heightened as the dollar struggles to stay above its own support levels, we would be hesitant to conclude that ‘all is lost’ for gold. Will the gold price return to is past pattern of rising and falling with the euro and the other way to the dollar? If so, our expectation of some heavy falls in the $: € should see the gold price rising. But if it has divorced itself from this relationship and is walking its own road, it will fall. [Subscribe to Gold Forecaster for our forecasts].

Gold ETFs – As New York was closed yesterday, the SPDR gold ETF and Gold Trust holdings remain at 846.289 tonnes and at 210.35 tonnes respectively.

Since January 4^th 2016, 206.918 tonnes of gold have been added to the SPDR gold ETF and to the Gold Trust. Since January 6^th 2017 44.225 tonnes have been added to the SPDR gold ETF and the Gold Trust.

Regards,

Julian D.W. Phillips

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