Gold Today –Gold closed in New York at $1,245.80 on Wednesday. On Thursday morning in Asia, it jumped up to $1,258 and London followed through to set it at the LBMA price setting at $1,257.65, up from $1,247.75, on Thursday.

The dollar index is higher today, at 94.45 down from 94.05 on Wednesday. The dollar is stronger against the euro at $1.1315 down from $1.1366 Tuesday.

The gold price in the euro was set at €1,111.49 up from €1,097.57 Thursday.

Yuan Gold Fix

We are waiting for the publication of the Shanghai Gold Fix for yesterday afternoon and today’s Fixings and will report them once we have them. The SGE has not yet loaded them onto its website. We are surprised that this has not happened yet, as the gold world waits with baited breath to see if a divergence is appearing between London and Shanghai. No doubt Shanghai is waiting too.

Repeat: To get the price in dollars, one will have to take the SGE gold price and divide it by 32.1507465 x 1,000 to get a price per ounce in Yuan. Then divide this price by the $: Yuan exchange rate at the time of the Fix. E.g. 256.92 / 32.1507465 x 1,000 /6.4746 = $1,234.22. We discuss these in our newsletters – subscribe now!

Ahead of New York’s opening, the gold price was trading at $1,267.30 and in the euro at €1,117.30.

Silver Today –The silver price closed in New York higher at $16.97 on Wednesday.Ahead of New York’s opening the silver price stood at $17.60.

Gold (very short-term)

The gold price will continue to rise steadily, in New York today.

Silver (very short-term)

The silver price will continue to run as gold is now rising, in New York today.

Price Drivers

The gold price is breaking through overhead resistance solidly on a daily basis. This is remarkable in the light of ‘stale’ bull selling. As you can see below the last two days has seen significant sales from the SPDR gold ETF, but this has not dented the price rise, implying that there is considerable underlying strength in the gold price. At the moment this is not due to a weak dollar as the dollar is stronger today.

It is the day when Mario Draghi makes a statement from the E.C.B. He is not expected to raise interest rates in the light of the very weak levels of growth and inflation. The continued narrowing of company margins, lower turnovers and the castigation of Spain for not following through on structural changes by the I.M.F., makes the future darker than has been seen for some time. Pressures on the E.U. remain discouraging to the extent that the U.S. Fed is looking at the global picture when contemplating rate hikes.

With debt level burdens across the world far too high [and at disturbing levels in China there are growing concerns of debt default, particularly in the corporate sector. And it is into that sector that money is flowing in the hopes of capturing yields which cannot be found in the interest rate markets across the globe. This is not the traditional reason for buying equities. Expectations of growing yields, drives demand for equities, not a retreat from interest rates.

Gold ETFs – In the last two days, we have seen sales of 7.43 tonnes from the SPDR gold ETF and sales of 0.48 of a tonne from the Gold Trust. This leaves their holdings at 805.032 and 187.56 tonnes in the SPDR & Gold Trust respectively.

Silver – The silver price is amazing all as it continues to soar. Since yesterday it has risen 3.71%. It does appear to have a very long way to go up still, running ahead of the gold price. While the two metals are usually treated as monetary metals [alternatives to currencies] silver’s historic price performance is far more vigorous than gold and far more volatile. It is a narrower market than gold, which has many facets in its monetary role. Nevertheless, right now retail investors as well as institutional investors note its historic performance [peak $50 an ounce] and Technical background which points to a sterling performance.

Regards,

Julian D.W. Phillips

GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance