Gold Today –Gold closed in New York at $1,247.30 up from $1,239.40 on Wednesday. On Thursday morning in Asia it rose to $1,258, after the dollar weakened and before the LBMA price setting.

LBMA price setting: $1,256.60 up from Wednesday’s $1,244.75.

Yuan Gold Fix

The Shanghai Gold Fixings are now showing just how currency moves are affecting the gold price. Overnight the dollar has weakened in a host of currencies including the Yuan. Please note that this rise in the gold price is not Yuan strength but dollar weakening. As a result, while there were only slight moves inside China in the Yuan gold Price, in dollar terms the moves were compounded by the weak dollar.

International investors should note that the same is true in their own currencies. Outside of the U.S. it is not the dollar price that counts, but the gold price in their own currencies that counts!

We see the dollar’s bull market is over and this will be reflected in the dollar price of gold constantly. Gold always measures the value of currencies not the other way around!

The dollar index is lower today, at 93.88 down from Wednesday’s 94.39. The dollar is weaker against the euro at $1.1345 from Wednesday’s $1.1314.

The gold price in the euro was set at €1,100.19 down from Wednesday’s €1,100.19.

Ahead of New York’s opening, the gold price was trading at $1,255.50 and in the euro at €1,106.70.

Silver Today –The silver price closed in New York higher at S17.28 on Wednesday up from Tuesday’s $17.21. Ahead of New York’s opening the silver price stood at $17.32.

Gold (very short-term)

The gold price will move in the opposite direction to the dollar, in New York today.

Silver (very short-term)

The silver price will continue rise in line with the dollar’s fall, in New York today.

Price Drivers

The Fed mentioned the improvement in labor numbers, despite a slowing in economic activity. This appears contradictory or does it indicate that labor number improvements are peaking in the U.S.? The Fed is data led, so we cannot draw any definitive conclusions from the statement.

The Fed may not have highlighted international vulnerabilities, but we would ascribe that more to the dollar being under control and either moving sideways or weakening, from now on. Nevertheless, it remains a prime concern.

Underpinning the global economy is not only artificial intelligence’s reduction of jobs globally at an accelerating pace, but the continuous shift of wealth and manufacturing to the east. This is barely mentioned in the media and is unlikely to slow, so long as wage and cost disparities between east and west continue.

The undermining of dollar hegemony is adding to uncertainties. The crucial reason the dollar gained its position was that all had to pay for oil with U.S. dollars. Now it is reported that not only will China have a Yuan oil contract in Shanghai, but Russia is finalizing a Ruble oil market. The biggest supplier and the future biggest user of oil, will impact the use of the dollar.

The process of less use of the dollar may well not be a short term happening, but over time it will structurally change the monetary world and gold and silver will benefit considerably.

Gold ETFs – Yesterday saw no sales or purchases of gold to or from the SPDR gold ETF and the Gold Trust. This leaves their holdings at 802.654 and 187.56 tonnes in the SPDR & Gold Trust respectively.

Silver – The silver price will continue to show robust behavior but following gold directionally. It promises to outperform gold in the future.

Regards,

Julian D.W. Phillips

GoldForecaster.com | SilverForecaster.com | StockBridge Management Alliance