Silver Market Morning: Mar 1 2017 - Gold was not Trumped but took a step back!

Gold Today –New York closed at $1,251.50 on the 28^th February after closing at $1,251.00 on the 27^th February. London opened at $1,244.00 today.

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

  - The $: € was stronger at $1.0557: €1 from $1.0593: €1 on yesterday.

- The Dollar index was stronger at 101.57 from 101.09 on yesterday.

- The Yen was weaker at 113.45:$1 from yesterday’s 112.44 against the dollar.

- The Yuan was weaker at 6.8783: $1, from 6.8689: $1, yesterday.

- The Pound Sterling was weaker at $1.2373: £1 from yesterday’s $1.2427: £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.]

At the close in Shanghai today, the gold price was trading at 279.50 Yuan once again, which directly translates into $1,263.89. But allowing for the difference of gold being traded this equates to a price of $1,258.89. This is $7.39 higher than the New York close and $14.89 higher than London.

Trump’s speech was a patriotic call mainly but lacked sufficient details to move markets significantly. We expect London and New York to move back up towards the Shanghai price in the next few days in line with dollar moves.

LBMA price setting: The LBMA gold price was set today at $1,246.05 down from yesterday’s $1,251.90.

The gold price in the euro was set higher at €1,182.21 after yesterday’s €1,181.15.

Ahead of the opening of New York the gold price was trading at $1,245.05 and in the euro at €1,181.26. At the same time, the silver price was trading at $18.35.

Silver Today –Silver closed at $18.34 at New York’s close yesterday against $18.23 on the 27^th February.

Gold _{(very short-term)} The gold price should start to recover from the lows of London, in New York today.

Silver _{(very short-term)} The silver price wait for gold to catch up, in New York today.

Price Drivers

Before London’s opening the gold price was moved down by $8 from New York’s close. This sort of move is not unusual and can easily be reversed. With the Trump speech a patriotic rallying cry, but lacking in specific details the U.S. markets are relatively unmoved. We expect a similar reaction in the gold price but being seen in a recovery of the price to levels from which it has fallen in the last day.

What he did state was that the government will spend $1 trillion to boost growth in the U.S. and provide jobs for Americans. This is a vast number that will be paid for by more debt. For anyone to properly assess Trump’s plans they need to have details of his Tax cuts. He tells us the cuts will be huge.

We expect the market to react by weakening the dollar, over time, and to favour gold, over time, in the U.S. as U.S. debt becomes excessive. We are already seeing foreign investors begin to shy away from investing in U.S. Treasuries.

India

India’s February imports of gold surged in February. India's February gold imports surged to 50 tonnes, up more than 82% from a year ago, on pent-up jeweler demand and as retail consumers ramped up purchases for weddings.

The rise in imports by the world's second-biggest consumer of the precious metal will support global prices that are trading near their highest level in 3-1/2 months.

India's gold imports had fallen to 27.4 tonnes in February 2016 as buyers postponed purchases in anticipation of a reduction in the import duty in the budget at the time.

This February, retail demand improved as cash supplies moved to the normal levels before de-monetization.

Gold ETFs – Yesterday saw no sales or purchases from or into the SPDR gold ETF but a purchase of 0.41 of a tonne into the Gold Trust. Their respective holdings are now at 841.169 tonnes and 202.24 tonnes.

Once the markets have digested the Trump speech, we may well see activity increase.

Since January 4^th 2016, 242.379 tonnes of gold have been added to the SPDR gold ETF and to the Gold Trust. Since January 6^th 2017 32.298 tonnes have been added to the SPDR gold ETF and the Gold Trust.

Regards,

Julian D.W. Phillips

GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance

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