Gold Market Morning: August-3-2017: still consolidating

Gold Today–New York closed yesterday at $1,278.40.London opened at $1,261.40today.

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

 -The $: € was weaker at $1.1849after the yesterday’s$1.1832: €1.

-The Dollar index was weaker at 92.92 after yesterday’s 92.99.

-The Yen was stronger at 110.66 after yesterday’s 110.78:$1. 

-The Yuan was strongerat 6.7237after yesterday’s 6.7253: $1. 

 -The Pound Sterling was almost unchanged at $1.3232 after yesterday’s $1.3223: £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 at almost $14 higher than Shanghai’s yesterday’s close. In what we see as a striking testament to the power of Shanghai’s pricing dominance Shanghai moved slightly lower than its previous close with London following it at today’s open with $4.60 discount to Shanghai’s trading level today. With the gold world still looking at New York in the belief that the world will follow that market an understanding of the interrelationship of the three global gold markets is becoming paramount!

Silver Today –Silver closed at $16.73 yesterday after $16.76 at New York’s close Tuesday.

LBMA price setting:The LBMA gold price was set today at $1,261.80 from yesterday’s $1,266.25.The gold price in the euro was set at €1,065.35 after yesterday’s €1,070.55.

Just before the opening of New Yorkthe gold price was trading at $1,263.00 and in the euro at €1,066.50. At the same time, the silver price was trading at $16.48.

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 in New York yesterday ran away with itself but on no physical gold movements in the gold ETFs. COMEX was the main influence on gold prices there. In the past this would have been enough to drive physical gold prices higher, but this time it had no influence on global gold prices.In fact, this morning we see New York badly out of line with the other two main global gold markets and expect it to be pulled down to London and Shanghai’s level today. This should not be translated as gold’s weakness but as evidence that COMEX is no longer the main influence on gold prices. The physical markets in gold are the determinant of gold prices going forward. This is a tremendous structural change in global gold markets. What is remarkable is that it is being ignored by commentators in the western world’s gold markets.

Currencies have played almost no role in the last day’s gold price action. However, we continue to see the dollar index gently decline.

Gold ETFs –The SPDR gold ETF holdings remain unchanged as no sales or purchases took place yesterday but in the Gold Trust sales of 0.58 of a tonne took place. The SPDR gold ETF and Gold Trust holdings are at 791.875 tonnes and at 211.43 tonnes respectively.

Since January 4^th 2016, 163.318 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 0.843 of a tonne in 2017.

Regards,

 Julian D.W. Phillips 

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