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-- Published: Tuesday, 19 July 2016 | Print | Comment - New!

Gold Today –Gold closed in New York at $1,329.30 on Monday after Friday’s close at $1,328.50. In Asia, the gold price tried to rise slightly again. The arbitrage potential remains very small at the moment.

- The $: € rose slightly to $1.1058 down from $1.1054.

- The dollar index rose to 96.77 from 96.58 Monday.

- The Yen was slightly weaker at 106.11 from Monday’s 105.66 against the dollar.

- The Yuan was stronger at 6.6920 from 6.6980 Monday.

- The Pound Sterling was weaker at $1.31.67 down from Monday’s $1.3274

Yuan Gold Fix

The Chinese gold market tried to rise again but closed only slightly changed in Shanghai. The arbitrage ‘spread’ is very small, at the moment.

It is becoming clearer to all in the financial world that very low interest rates will remain at these levels or lower for the next decade or so. Inflation is trying to rise in the U.K. and other countries but is struggling to do so, in others.

We should not take our eyes off the hefty wave of deflation flowing over the world from early in this century until now and should continue to do so for the next decade. But we do not expect the period ahead to be a calm period of low interest rates alone. The pressures that come with it have been seen in 2008 and thereafter, with similar destructive crises springing up on the way through the next decade.

The likelihood of inflation springing up while deflation takes its toll is getting stronger. This would be very destructive to the monetary world.

LBMA price setting: $1,332.20 up from Monday 18th July’s $1,326.15.

The gold price in the euro was set at €1,204.74 up €5.04 from Monday’s €1,199.70.

Ahead of the opening in New York the gold price stood at $1,331.40 and in the euro at€1,205.27.

Silver Today –The silver price closed in New York at $20.07 on Monday the same as Friday of last week. Ahead of New York’s opening the price was trading at $19.99.

Gold (very short-term)

The gold price will consolidate in New York today.

Silver (very short-term)

The silver price is will consolidate, on support, in New York today.

Price Drivers

Gold and silver prices are not keen to fall despite the relatively poor Technical picture. With silver now sitting on support, the slightest encouragement to prices will send it soaring. As to gold the current price area is some way above support, but the psychological support at $1,300 is still some way off still. But gold does not want to pull back as physical gold purchases have resumed again into the U.S. based gold ETFs.

The quiet price period for gold is now. In this period gold has performed very well so far, because of the tribulations on the monetary front.

While June imports into India were weak, previous months were strong. Weak June numbers are normal for that country. They will rise substantially from September onwards as the crops are harvested and sold there.

In China demand remains solid, if not spectacular as lower Yuan prices attract long term investors there, still. We do expect these three types of demand to add to the demand in the U.S. and Europe in the second half of the year around seven weeks away. [More in our newsletters – subscribe below].

Gold ETFs – In New York on Monday there were purchases into the SPDR gold ETF of 2.376 tonnes , but there were no purchases or sales from the Gold Trust, leaving their holdings at 965.221 tonnes and at 216.34 tonnes respectively.

Since January 4th this year, the holdings of these two gold ETFs have risen by 383.97 tonnes.

Silver –Silver prices have settled back to strong support now. This does not mean they will automatically rise and not fall. Support is a price area where buyers are most likely to enter the market.

As we said yesterday, “We suspect that silver prices are like an arrow being pulled back with the bowstring waiting for gold prices to release it.”

Regards,

Julian D.W. Phillips

GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance [Gold Storage geared to avoid its confiscation]