US Gold ETF Buyers Are Back In Force!

February 3, 2017

Gold Today –New York closed at $1,215.30 on the 30th January after closing at $1,190.90 on the 27th January. London opened at $1,213.50 today.

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

 -         The $: € was weaker at $1.0758: €1 from $1.0711: €1 on the 30th January.
 -         The Dollar index was weaker at 99.88 from 100.34 on the 30th January. 
 
-         The Yen was slightly stronger at 113.12:$1 from the 30th January’s 113.66 against the dollar. 
 
-         The Yuan was stronger at 6.8632: $1, from 6.8772: $1, on the 30th January.  
-         The Pound Sterling was stronger at $1.2524: £1 from the 30th January’s $1.2502: £1.

Yuan Gold Fix

Please note that the Shanghai Fixes are for 1 gm of gold. From the Middle Eat 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.]

With Shanghai open today for the first time since last Thursday, we won’t have the two daily Fixes for today until tomorrow. Meanwhile, Shanghai was trading today at 269.80 towards the close today after their return from the big annual holiday. This equates to $1,222.71.  This leaves it just $2 higher than the close in New York.

LBMA price setting:  The LBMA gold price was set today at $1,213.05 down from yesterday’s $1,224.05. 

The gold price in the euro was set higher at €1,129.78 after Monday’s €1,119.85.

Ahead of the opening of New York the gold price was trading at $1,212.00 and in the euro at €1,128.39.  At the same time, the silver price was trading at $17.34. 

Silver Today –Silver closed at $17.47 at New York’s close yesterday against $17.15 on the 30th January. 

Gold (very short-term) The gold price will consolidate with a stronger bias, in New York today.                                                                                             

Silver (very short-term) The silver price will consolidate with a stronger bias, in New York today.

Price Drivers

We have been away from our desk since Monday and clearly missed a positive change in tone in London’s gold market due to the significant return of investors into the U.S. based gold ETFs. The shares U.S. investors bought into the SPDR gold ETF translated into buying of physical gold in London Wednesday.

On COMEX yesterday there was a jump in the volume of call options bought enjoying the rise in the gold price.

Shanghai’s opening today brought no fireworks. The gold price there is roughly in line with New York and London, so we have yet to see Chinese demand come to life still. With seasonal gold buying there over, we expect to see commercial gold trading come to life before retail trading as it will take time before retail buying comes back With the gold price still above $1,200, there is little enthusiasm to hunt for bargains. We remain in consolidation mode today.

President Trump’s latest actions continue to dominate world news and both in the U.S. and the rest of the world looks through a mixture of horror, delight and amazement at his actions. We expect his presidency to be world changing, already bringing in uncertainty.

We have no doubt that his review of the Dodd-Frank act will be followed by him fulfilling election promises of lower taxes and infrastructure spending.

Gold ETFs – Since the 30th January we have seen 12.148 tonnes of gold bought into the SPDR gold ETF and 1.01 tonnes of gold bought into the Gold Trust.  Their respective holdings are now at 811.218 tonnes and 199.91 tonnes. 

This is a large amount when we look at the influences on the gold price in the last two days. It also explains why the gold price broke higher in London’s morning yesterday to Fix at $1,224.05. The pull back in New York does not yet reflect this big purchase but should do so today.

Since January 4th 2016, 210.248 tonnes of gold has been added to the SPDR gold ETF and to the Gold Trust.  

Julian Phillips is the Founding Partner of Gold Forecaster - Global Watch and Silver Forecaster [incorporating Platinum]. Mr. Phillips analyzes the gold, silver, and platinum market alongside the macro economic currency aspects of these precious metals. He covers the shares involved in these sectors and publishes numerous articles on specialist websites concerning precious metals. Mr. Phillips is also a specialist in Exchange Controls and international currencies. He has qualified to be a member of the London Stock Exchange. His working life has focused on Gold/Currencies/Fund Management and now Silver and Platinum. Additionally, Mr. Phillips has spent some years in capital creation in currency distressed countries through exchange control incentives. Mr Phillips is also the Chairman of Stockbridge Management Alliance Ltd. a company that offers gold storage in a way designed to prevent its confiscation should such an order be issued in any country. His websites are at http://www.goldforecaster.com  and http://www.silverforecaster.com/.

With gold stolen by Conquistador Francisco Pizarro from the Inca Empire in 1532, Spain financed its conquest of Europe.