Silver Market Morning: June 2 2017 - Gold consolidating in a tight range!

Julian D. W. Phillips
|
Friday, June 2nd

Gold Today New York closed at $1,270.10 yesterday after closing at $1,267.00 Wednesday. London opened at $1,262.10 today.

 

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

 

  - The $: € was unchanged at $1.1222 after yesterday’s $1.1222: €1.

- The Dollar index was slightly stronger at 97.20 after yesterday’s 97.17.

- The Yen was slightly weaker at 111.51 after yesterday’s 111.15:$1.

- The Yuan was much weaker at 6.8153 after yesterday’s 6.8062: $1.

- The Pound Sterling was stronger at $1.2875 after yesterday’s $1.2855: £1.

 

Yuan Gold Fix

Trade Date

Contract

Benchmark Price AM 1 gm

Benchmark Price PM 1 gm

2017 6 2

2017 5 1

2017 5 31

SHAU

SHAU

SHAU

 

278.93

279.65

 

Trading at 278.70

278.63

278.9

$ equivalent 1oz at 0.995 fineness

@ $1: 6.8153

$1: 6.8062

$1: 6.8180

 

 

 

$1,269.67

$1,270.75

 

Trading at $1,266.92

$1,268.30

$1,267.33

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.]

 

The Yuan is correcting lower, but this does not mean anything as the authorities in Shanghai are continuing their quest to attack speculation and bring stability to the Chinese financial markets.


Shanghai is still drifting lower but the falls are only slight. We note that Shanghai was trading slightly lower than New York today.

 

Silver Today –Silver closed at $17.28 yesterday after $17.32 at New York’s close Wednesday.

 

As the gold price trading range tightens to a breakout point, we look at the silver price which is presenting a different Technical picture. If the gold price falls the silver price will tumble according to the charts. But if gold rises the silver price will follow as usual. But such a rise will change the Technical picture quite dramatically to the upside. Either way the silver price will prove more explosive than the gold price.

 

LBMA price setting: The LBMA gold price was set today at $1,260.95 from yesterday’s $1,266.15. The gold price in the euro was set at €1,121.09 after yesterday’s €1,128.58.

 

Ahead of the opening of New York the gold price was trading at $1,268.45 and in the euro at €1,125.71. At the same time, the silver price was trading at $17.33.

 

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

 

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

 

Price Drivers

Today, it was London that pulled the gold price back at the price setting. Just ahead of New York’s opening the gold price rose quickly. We now see Shanghai and New York in line with each other. If Shanghai turns higher with a higher Yuan price of gold tomorrow, we would expect to see prices rise. The gold price itself has already moved above resistance, but needs to hold over $1,275 before resistance is out of the way properly. The longer the gold price continues to consolidate the more significant the subsequent moves will be. [For our forecasts, subscribe through www.GoldForecaster.com]

 

President Trump continues to upset the political world in the U.S.A. and across the globe. But for gold the inability of the U.S. government to get ‘things done’ is disappointing markets. These remain focused on the June rate hike. Warnings that U.S. equity markets are too high are being ignored and U.S. investment in gold remains absent.

 

The Fed – We expect the Jobs numbers to be solid again. What is encouraging for the U.S. economy is that those workers who took part-time jobs but want full time work are finding full time work. The Fed needs to see the number of these workers finding full time work increase. Only then will we see an impact on wages, a needed requirement before the Fed can raise rates without hurting the economy.

 

Will this affect the gold price? In the past it may have done, but with other gold markets having a greater impact on the gold price than the U.S. now, we cannot see this happening. If it does, the impact will only be a temporary negative. We will watch the reaction of investors into the U.S. based gold ETFs to get a clearer picture.

 

We do not see the U.K elections affecting the gold price. The same is true of the Brexit negotiations until some clear steps are made. Until U.S. investors return to the gold market, via the US. Based gold ETFs we believe the main influence on the gold price will be the steady shifting of gold bullion to China and India, via Swiss refineries. But not until London feels the squeeze on liquidity levels will we see Asian demand drives up the gold price.

 

Gold ETFs – Yesterday, again, saw no sales or purchases of gold to or from the SPDR gold ETF. Once again the internet page of the Gold Trust was a wrong page, so we cannot report on yesterday’s activity in that ETF. Their holdings are now at 847.452 tonnes and we presume, at 202.97 tonnes respectively.

 

Since January 4th 2016, 248.884 tonnes of gold have been added to the SPDR gold ETF and to the Gold Trust. Since January 6th 2017 38.838 tonnes have been added to the SPDR gold ETF and the Gold Trust.

 

Regards,

 

Julian D.W. Phillips

 

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Global Gold Price (1 ounce)

 

Today

Yesterday

Franc

Sf1,226.59

Sf1,228.45

US

$1,268.45

$1,266.45

EU

€1,125.71

€1,128.64

India

Rs.81,737.65

Rs. 81,667.03