Gold Market Morning: August-1-2017: Gold consolidating above support!

Gold Today–New York closed yesterday at $1,273.40.London opened at $1,269.00 today.

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

-The $: € was weaker at $1.1833 after the yesterday’s$1.1725: €1.

-The Dollar index was weaker at 92.98 after yesterday’s 93.50.

-The Yen was stronger at 110.47 after yesterday’s 110.67:$1. 

-The Yuan was strongerat 6.7179after yesterday’s 6.7282: $1. 

-The Pound Sterling was stronger at $1.3202 after yesterday’s $1.3122: £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.]

New York closed $4.40 higher than Shanghai’s close on yesterday. London opened at the same level as Shanghai. All three global gold markets continue in synch.

Silver Today –Silver closed at $16.78 yesterday after $16.75 at New York’s close Friday.

LBMA price setting:The LBMA gold price was set today at $1,267.05 from yesterday’s $1,266.35.The gold price in the euro was set at €1,071.95 after yesterday’s €1,079.31.

Just before the opening of New Yorkthe gold price was trading at $1,266.20 and in the euro at €1,072.14. At the same time, the silver price was trading at $16.66.

Gold_{(very short-term)}

The gold price should consolidate, in New York today.      

Silver_{(very short-term)} 

The silver price should consolidate in New York today.      

Price Drivers

The gold price remained strong but has not yet broken higher, as it sits on support that was previously overhead resistance. We continue to expect more strength, shortly. The dollar price of gold does not reflect buying and selling of gold at the moment but the weakness of the dollar. The strength of the euro likewise does not reflect gold demand in Europe. Hence the fall in the euro gold price today seems to us out of line and likely to recover adding strength to the gold price’s rise.

The dollar’s weakness is heavy today against all currencies and not just against the euro. We repeat that this is not just due to the White House incidents or Trump’s family despite the media insisting that it is. Global currency markets and particularly the dollar would not move on such non-financial incidents.

The problem with the dollar is that it is expensive and other currencies are hurrying to take a chunk out of its dominance. The dollar is structurally weak. The post-election hopes of a re-invigorated U.S.A. have faded, so returning the dollar back to its pre-election fundamentals. This leaves the U.S. with negative yields.

Comments from Alan Greenspan, that the equity market is not yet a ‘bubble’ but the bond market is, comes as a stark warning to financial markets. When it does ‘pop’ everyone will be hurt he says. When that happens, you will see equity and property prices badly damaged too. Gold will become a haven for U.S. investors then too.

We reflect on the fact that at one time the euro cost $1.40.

Gold ETFs –The SPDR gold ETF and the Gold Trust holdings remain unchanged as no sales or purchases took place yesterday.

The SPDR gold ETF and Gold Trust holdings are at 791.875 tonnes and at 210.87 tonnes respectively.

Since January 4^th 2016, 162.758 tonnes of gold have been added to the SPDR gold ETF and to the Gold Trust.  Since January 6^th 2017, 0.283 of a tonne of gold has been added to the SPDR gold ETF and the Gold Trust. The gold acquisitions by these two funds in 2017 have returned to the positive and now stand at 0.283 of a tonne in 2017.

Regards,

Julian D.W. Phillips 

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