Author Archives: citygold

Gold Bullion 'On Back Foot' vs Rising US Dollar But GLD Holdings Near Brexit High

GOLD BULLION fell to 5-week lows against a rising US Dollar in London trade Wednesday, dropping as world stock markets caught up with yesterday’s fall in New York’s stock market.
 
Ahead of tomorrow’s policy decision from the European Central Bank, the Euro price of gold was unchanged around €1084 per ounce, little moved from one or three months ago.
 
But slipping to $1320 for US investors as New York opened today, gold traded 1.2% below last week’s finish in Dollar terms.
 
Silver prices meantime fell more heavily than gold bullion, losing 3.3% for the week so far to hit $16.54 per ounce.
 
That pushed the Gold/Silver Ratio of the two metals’ relative prices back up towards 80 ounces of silver per 1 ounce of gold.
 
The highest level for gold vs. silver in a week, that was just below this month’s 2-year highs in the Gold/Silver Ratio.
 
Gold also held near record highs relative the price of platinum, trading more than $400 per ounce higher than that primarily industrial metal.
 
“Gold opened on the back foot today,” says Wednesday’s Asian trading note from Swiss refining and finance group MKS Pamp, “with a stronger USD providing some headwind for the metal.”
 
“Persistent Comex selling [of gold futures and options contracts has] continued the pressure.”
 
Among investment products, the size of the SPDR Gold Trust (NYSEArca:GLD) was unchanged Tuesday for the 8th day running, needing just less than 866 tonnes of bullion to back the value of its shares in issue.
 
Now around two-thirds of the GLD’s all-time peak size of late 2012, that was 1 tonne below the exchange-traded gold fund’s largest size since the UK’s shock Brexit referendum result of mid-2016, when Dollar gold prices hit what remains the highest level of the last 4 years at $1375 per ounce.
 
Chart of SPDR Gold Trust (NYSEArca:GLD) bullion backing. Source: BullionVault via ExchangeTradedGold.com
 
Interest in the world’s largest silver-backed ETF in contrast – the iShares Silver Trust (NYSEArca:SLV) – held Tuesday at its lowest level since late-February, needing 9,856 tonnes of bullion.
 
Mexico silver miner Fresnillo (LON:FRES) – the world’s No.1 producer – today said its output grew 14.0% in January-March compared to the same period last year.
 
That first-quarter increase was in line with Fresnillo’s forecast growth for a second consecutive annual record across 2018 of some 2,000 tonnes.
 
Gold prices in China – the largest mining, importing and consumer nation – slipped Wednesday to their lowest level against the Yuan since the start of this month.
 
Relative to Dollar quotes for London settlement, that kept the Shanghai premium around $7.50 per ounce, some 15% below the typical incentive for new bullion imports.
 
Direct gold imports to the Chinese mainland from global refining center Switzerland fell 40% last month from February says German financial services group Commerzbank, citing Swiss Federal Customs data, but imports through Hong Kong rose sharply.
 
Dollar gold prices now have “key mid-term supports” from the 100- and 200-day Moving Averages according to a technical analysis from French investment and London bullion market-making bank Societe Generale, pointing “near $1317 and $1308/1300” respectively.

Gold Mining Output -20% in Q1 at No.1 Barrick But Rising Costs Lag Price

GOLD MINING shares rose as the broader stock market rallied Tuesday while the rise in US bond yields paused with 10-year rates just shy of 3%.
 
Gold bullion prices bounced $5 per ounce from yesterday’s 2-week low, touching $1328 as London opened for business.
 
That left gold little changed around last Friday’s finish in non-US currency terms as the Dollar joined bond yields and paused its rise of the last week on the FX market.
 
Silver and platinum kept all of Monday’s 2.7% and 1.0% drops respectively, trading back at $16.65 and $918 per ounce.
 
Palladium also failed to bounce after sinking over 6% yesterday amid reports that Washington may ease US sanctions over the metal against its No.1 miner, Russia.
 
The FTSE Gold Mines index meantime edged higher after the world’s largest stockmarket-listed gold miner reported a 5% rise in first-quarter earnings despite a 20% drop in gold ounces mined.
 
Announcing suspension of a “prefeasibility study” on the Andes mountain project at Pascua-Lama – expected to produce 125 tonnes over its first 5 years but shut since 2013 by environmental orders from the government of Chile – Barrick said its all-in sustaining costs rose 4.1% in January-March from the same period of 2017 to reach $804 per ounce.
 
Bullion market prices rose 9.0% year-on-year in Q1 to average $1329.
 
Barrick’s full-year guidance remains for maximum output of 155 tonnes in 2018, a further 6% drop after 2017’s fall of 4%.
 
Barrick’s output has now shrunk “nearly 40% since its peak of 2006,” according to Reuters, having sold a raft of assets to raise money in 2014-17.
 
Total debt has meantime halved to $6.4 billion from the peak of 2012-2013, and “Barrick does not intend to sell further assets for the purposes of debt repayment,” the company said Monday.
 
“Proceeds from any future portfolio optimization will be used to enhance our project pipeline, or returned to shareholders.”
 
At the top of gold’s bull run in 2012, ABX paid a dividend of 75 cents per share, offering a yield of some 1.6% to that year’s opening price.
 
Last year it paid 12 cents per share, a yield on 2017’s opening price of 0.5%.
 
Chart of Barrick Gold Corporation (NYSE:ABX) vs Dollar price of gold, 1985-2018. Source: BullionVault
 
Barrick’s stock fell 1.8% on Monday, dropping to 1-week lows.
 
First quarter results are due from No.4 gold miner Goldcorp (NYSE:GG) on Wednesday, No.2 Newmont (NYSE:NEM) on Thursday, and No.3 Anglogold Ashanti (JSE:ANG) in early May.
 
Data from the world’s largest gold producer nation China last week said its mining output fell 3% in Q1 after falling 6% across 2017 as a whole.

Gold and Silver Fall, Ratio Turns Up as US Bond Yields Rise Near 4-Year High

The GOLD / SILVER RATIO rose from near 2-month lows in London trade on Monday as both metals fell against a rising Dollar after new US data beat analyst forecasts.
 
With manufacturing activity and sales of existing homes both stronger than Wall Street predicted, world stock markets held flat as falling bond prices saw the yield on 10-year US Treasury debt rise near 4-year highs at 2.98%.
 
Silver prices erased all of last week’s 2.8% gain by mid-afternoon in London, trading back down at $16.65 as gold fell to 2-week lows of $1323 per ounce.
 
That pushed up the Gold/Silver Ratio of the two precious metals’ relative prices, with one ounce of gold equal to 79.5 ounces of silver.
 
“Higher real [interest] rates have not always resulted in negative gold returns,” says analysis from the mining-backed World Gold Council today, pointing to a “waning” correlation between gold prices and bond yields adjusted for inflation expectations, while “the US Dollar is again [becoming] a stronger indicator of the direction of price.”
 
Chart of gold priced in Dollars  vs. real 10-over-10 US bond yields. Source: St.Louis Fed
 
Based on monthly returns since 1971, the WGC finds that gold prices have risen twice as much during weak Dollar periods than they fell when the Dollar rose, adding 1.5% on average versus a weaker USD but losing only 0.7% against the greenback when it strengthened.
 
“Weaker USD and [investors] hedging tail risks [are] supportive, but easing geopolitics [make] price risk broadly balanced,” says a precious metals note from analyst Robin Bhar at French investment and London market-making bank Societe Generale.
 
“More downside than upside potential,” says the SocGen note of gold, silver and platinum, with palladium “the [only] highlight from a range bound complex – buy the dips.”
 
Net of bearish bets, the position of hedge funds and other money managers on Comex gold futures and options last week grew to the most bullish since end-March.
 
Rising to the equivalent of 446 tonnes of notional gold, it was one-eighth greater than the ‘Managed Money’s average net speculative long position of the last 10 years.
 
Betting on silver prices in contrast stayed negative among money managers for the 10th week running, now the longest stretch since current records began in 2006.
 
Rising again after falling from 2-year highs when silver prices jumped last week, the Gold/Silver Ratio has risen 81% of the time that silver has fallen on a 1-month basis since 1968.
 
“Gold failed at resistance [around] $1355 and the 100-day moving average might be the first support level at $1328,” said a brief technical analysis from the trading desk of Belgian refinery group Umicore Monday morning.
 
Silver “[has] found buyers once again below $17,” says a trading note from Swiss refining and finance group MKS Pamp. 
 
“Gold should find support at the April lows around $1321.”

Silver Price Up 3.2% on Week as Trump Turns on Opec, Inflation 'All Over' US Data

GOLD slipped Friday in London but silver prices spiked to 11-week highs as US President Donald Trump berated the Opec oil cartel for “artificially” pushing energy prices up to 4-year highs by discussing new output cuts.
 
Asian stock markets fell but Europe held flat on the day, keeping the Stoxx Europe 600 Index unchanged from last Friday’s finish.
 
Silver prices hit $17.35 per ounce, extending their outperformance of gold for a 3.2% weekly gain as New York opened for business.
 
Gold in contrast slipped to $1341 per ounce, erasing almost half of last week’s $13 gain.
 
That pushed the Gold/Silver Ratio back down to 78 – the one-month low reached yesterday after gold had traded up to 2-year highs against the cheaper precious metal.
 
Major government bond prices fell meantime, pushing the interest rate offered by 10-year US Treasury bonds up to 2.92%, just shy of February’s 4-year highs.
 
“Inflation thumbprints all over the Philly Fed,” says asset manager Gluskin Sheff’s economist David Rosenberg of the latest Philadelphia region manufacturing data.
 
“The workweek soared to its highest level since October 1987; production bottlenecks too – vendor delays soared to an all-time high! Prices-paid [rate of gain] highest since March 2011. Prices-received jumped to a ten-year high.”
 
Chart of the Philadelphia Fed's manufacturing current prices-paid index vs. Dollar gold prices. Source: St.Louis Fed
 
“Looks like OPEC is at it again,” tweeted Trump as the oil cartel met with other producer states in Jeddah, Saudi Arabia to discuss output quotas.
 
“Oil prices are artificially Very High! No good and will not be accepted!”
 
Oil on Friday eased back from this week’s 4-year highs at $74 and $69 per barrel of European Brent and US West Texas crude respectively.
 
Thanks to Opec’s previous quota agreements, “The oil stockpile surplus that’s weighed on prices for three years is all but gone,” says Bloomberg.
 
“Still, the curbs should continue because another important goal – boosting investment in oil and gas production – remains far out of reach, said Saudi energy minister Khalid Al-Falih.”
 
Tempering that view, Russia’s energy minister Alexander Novak said today that both Opec and non-member producer countries could start to relax their oil production quotas “as early as this year,” Reuters quotes Moscow’s Tass news agency.
 
Growth in US shale-oil production meantime “could equal global demand growth” in 2018, the International Energy Agency said in a report earlier this year.
 
Priced in British Pounds, silver today jumped to 11-week highs above £12.20, offering a 4.6% weekly gain as Sterling extended a fall on the currency markets begun when Bank of England chief Mark Carney told the BBC last night that the UK’s 2019 exit from the European Union “could delay” interest rate rises.
 
Euro silver prices also rose to 11-week highs, coming within 3 cents of €14 per ounce.

Silver Prices +4% for Week, Gold Ratio Falls as India's Akshaya Tritiya Finds Only 'Token' Buying

SILVER PRICES extended their sharp rally in London trade Thursday, reaching new 11-week highs for US investors at $17.30 per ounce while gold edged back from an overnight rise.
 
Tokyo and Shanghai’s stock markets closed the day higher, but other major equity markets held flat as base metals and crude oil pushed the CRB Commodities Index up to its highest level since late 2015.
 
Silver held 4.0% higher for the week so far as New York opened for business, while gold at $1348 was barely changed from last Friday.
 
That pushed down the Gold/Silver Ratio of the two metals’ relative prices to its lowest level since 30 January, with one ounce of gold equal to 77.9 ounces of silver.
 
The ratio has averaged 71.0 over the last 5 years, rising to 2-year highs near 82 this spring as hedge funds bet heavily on silver falling
 
Chart of Gold/Silver Ratio, daily since 1968. Source: BullionVault via LBMA
 
Over in China overnight, and with Dollar gold prices trading at their highest level around Shanghai’s daily benchmarking auction since late-March’s sharp rise in US-China ‘trade’ war tensions, the Yuan price of bullion held unchanged on the day.
 
That cut the premium for gold landed in the world No.1 consumer nation one-third below the average incentive for new imports out of London – heart of the world’s wholesale bullion trade.
 
Gold prices in India also stayed soft on Thursday, with wholesale bars trading at a $0.75 per ounce discount to London quotes after accounting for the No.2 consumer nation’s 10% import duty.
 
Indian households made only “token” purchases of gold and silver for the Hindu festival of Akshaya Tritiya yesterday, Business Today reports.
 
“Consumers want to make purchases for Akshaya Tritiya,” Reuters quotes one Hyderabad retailer, “but they are not comfortable with the current price.
 
“They are making smaller purchases.”
 
Besides the 4% rise in Rupee gold prices so far this year, dealers also blamed the festival’s lackluster sales on a shortage of bank notes – denied by the Finance Ministry but met with extra note printing by the Reserve Bank of India.
 
After China reported solid 6.8% economic growth for the first quarter, led by consumer spending, “With the growth of high-end consumption and the development in second- and third-tier cities, the Chinese gold market will show substantial demand,” said China Gold Association director Song Xin last week
 
“[It’s] mostly unexplored for physical gold. More and more people [will] start to realize gold’s stored and retaining values in the long term.”

Gold Hits 18-Month High vs 'Safe Haven' Franc But Silver Jumps Faster as Trump Slams TPP

GOLD rose in London trade on Wednesday, recovering an overnight dip to reach $1352 per ounce for US investors and rising fastest against the ‘safe haven’ Swiss Franc and Japanese Yen currencies but outpaced by a sharp jump in the price of silver.
 
Rising almost 2% in London trade, silver prices touched 11-week highs against the Dollar at $17.11 per ounce.
 
That pushed the Gold/Silver Ratio of the two metals’ relative prices back below 80 for the first time since mid-March.
 
European stock markets failed to follow Asian equities higher, but commodity prices rose, with Brent crude oil nearing last week’s 3-year highs above $72.50 per barrel.
 
“While Japan and South Korea would like us to go back into [the Trans Pacific Partnership], I don’t like the deal for the United States,” tweeted US President Donald Trump ahead of a 2-day meeting with Japanese Prime Minister Shinzo Abe.
 
“Bilateral deals are far more efficient, profitable and better for OUR workers. Look how bad WTO is to US.”
 
“The multilateral rules-based trade system that evolved after world war two nurtured unprecedented growth in the world economy,” said International Monetary Fund economic counsellor Maurice Obstfeld yesterday, presenting the IMF’s latest forecast updates.
 
“It is in danger of being torn apart [because] voters’ disillusionment [with globalization] raises the threat of political developments that could destabilize a range of economic policies…reaching beyond trade.”
 
Gold prices rose fastest on Wednesday against the Swiss Franc, touching the highest level since the UK’s Brexit referendum shock of mid-2016 at CHF 1307 per ounce.
 
Having rejected a return to gold-backed currency in 2014, Swiss citizens will in June vote in a referendum on adopting ‘sovereign money’
 
Proponents of this ‘vollgeld’ initiative claim it will reduce financial volatility, risk and profiteering by making the central bank the sole source of new money creation.
 
Chart of gold priced in Swiss Francs. Source: BullionVault
 
Major government bond prices meantime slipped Wednesday, edging longer-term interest rates higher.
 
Ten-year US Treasury yields rose back to April’s highs so far at 2.83%.
 
New data today said annual consumer-price inflation in the UK fell to a 12-month low in March. But at 2.5% it remained above the Bank of England’s government-required target for the 14th month in a row.
 
UK inflation has now been higher than the BoE’s 2.0% target for almost two-thirds of the last 10 years.
 
So-called ‘core’ inflation in the 19-nation Eurozone – stripping out volatile food and fuel costs – meantime stuck at 1.0% yet again.
 
Over in Washington, Donald Trump welcomed news reports of CIA director Mike Pompeo’s secret Easter weekend visit to North Korea.
 
A briefing from the White House on Trump’s strategy for Syria in contrast left US lawmakers “unnerved” reports CNN, quoting one Republican senator as saying the administration is “going down a dangerous path” after last weekend’s airstrikes against Assad regime facilities.

Gold Prices Fall on US, UK and China Data as Trump Adds FX to 'Trade War'

GOLD PRICES fell below $1340 per ounce lunchtime Tuesday in London, retreating to unchanged from this time last week against most major currencies after much-stronger than expected US home-building stats.
 
March saw the number of new building permits rise 2.5% said the Census Bureau, with a revision to February’s data cutting the size of that month’s drop.
 
China earlier reported stronger-than-expected GDP data, with the world’s second-largest economy expanding by 6.8% annually in the first 3 months of this year.
 
The Shanghai Composite stock index closed 1.4% lower however, even as the People’s Bank cut its required reserves ratio, lowering the amount of cash which commercial lenders need to hold back from new loans in a bid to boost borrowing.
 
European stock markets then rose as major government bond yields eased back, trimming longer-term interest rates.
 
China’s Yuan meantime edged higher on the FX market after US President Trump accused Beijing of seeking to win a bigger share of exports by unfairly weakening its currency.
 

Russia and China are playing the Currency Devaluation game as the U.S. keeps raising interest rates. Not acceptable!

— Donald J. Trump (@realDonaldTrump) April 16, 2018

 
With Shanghai gold prices little changed on Tuesday, the premium for metal landed in China rather than London rallied to $8 per ounce, back in line with the average incentive for new imports to the world’s No.1 gold consumer nation.
 
China’s private gold consumer demand shrank 5.4% in January-March from the first quarter of last year, state body the China Gold Association said today, with sales of investment gold bars sinking 27.6%.
 
The UK gold price in British Pounds per ounce meantime fell back near March’s 3-month low after new jobs data beat analyst forecasts, with unemployment falling to a new four-decade low of 4.2%.
 
With the Pound jumping on the FX market, gold prices for UK investors fell below £934 per ounce, down 3.2% for 2018 so far.
 
The gold price in US Dollars, in contrast, traded 3.0% higher from New Year.
 
Chart of gold priced in US Dollars (blue, left) and in UK Pounds. Source: St.Louis Fed via LBMA
 
“Pound trades near post-Brexit highs as UK wages rise,” says the Financial Times of the currency move.
 
But while the Pound has now regained 19.7% versus the Dollar since early 2017’s low, it has rallied only 6.4% versus the Euro.
 
“The year-long squeeze on wages is nearing an end,” announces the BBC in its report on the UK data, using the ONS’s figure of 2.8% for February’s annual pay growth – in fact, an average of 3 months’ figures.
 
February alone in contrast saw a sharp deceleration in UK pay growth, dropping from 2.8% in January to 2.3%, the slowest rate since July and 0.4 percentage points below the Consumer Price Index’s increase.
 
Based on the monthly and not quarterly data, total UK wages have now failed to beat CPI inflation on 9 of the last 12 months of data.
 
But “First pay rise in a year ‘seals the deal’ for further rate rise,” says the London Evening Standard, quoting Dutch bank ING’s economist James Smith.
 
“With [this] final piece now in place,” agrees fund giant Fidelity’s investment director Tom Stevenson, “the Bank of England has the catalyst to follow through on its plans to raise interest rates at the next MPC meeting in May.”
 
Looking at US interest rate rises, “Three or four seems like a reasonable expectation this year,” said current New York Fed president William Dudley – due to stand aside this spring – to CNBC overnight.
 
“As long as inflation is relatively low, the Fed is going to be gradual.”
 
The US-China trade war meantime rolled on, with Beijing today imposing a ‘deposit’ charge of 178.6% on the value of shipments of US sorghum, starting Wednesday.

Gold Price Tries $1350 for 13th Time in 5 Years as 'Actual War' Pushes Trade War Aside

GOLD PRICES spiked against a falling Dollar in late London trade on Monday, recovering an earlier 0.5% dip as Moscow denied US claims that Russian forces have “interfered” with the site of last week’s deadly chemical weapons attack in Syria, while new data said US consumers spent more than analysts expected in stores and malls last month.
 
US retail sales grew 0.6% in March from February, the Census Bureau said, expanding at a 4.7% annual rate excluding foodstuffs – well above the last 20 years’ average of 3.8%.
 
UK prime minister Theresa May meantimee faced questions from lawmakers after failing to consult Parliament before the weekend’s joint airstrikes with US and French forces against the Syrian regime of Bashar al-Assad.
 
Russian foreign minister Sergei Lavrov meantime repeated his claim today that the chemical weapons attack on opposition Syrian civilians was a “staged thing…[and] Russia has not tampered with the site” since then, as alleged today by a US envoy to the United Nations’ chemical weapons team.
 
Gold rose against all major currencies as New York opened for trading, but it only rose above Friday’s closing level in US Dollar terms, moving above $1350 per ounce for the 13th time in the last 5 years.
 
Chart of USD gold price, last 5 years. Source: BullionVault
 
“We have certainly not heard the last about [US-China] trade wars,” says the latest weekly analysis from strategist Jonathan Butler at Japanese conglomerate Mitsubishi, “but for now the markets could remain focused on the threats of actual wars.
 
“Such tensions can quickly be priced out if the situation eases…[but] just as crude oil prices have taken strength from the current geopolitical situation, rising to a 3-year high on fears of Middle East supply interruption, so too we expect precious metals to remain well supported as traditional safe havens.”
 
Gold prices had slipped at the start of the week’s trading in China overnight, finally ending the day flat in Yuan terms while the Chinese currency itself retreated from last week’s rise near January’s 2.5-year highs against the US Dollar.
 
Together that halved the premium for gold delivered in Shanghai rather than the world’s central hub of London, down from a near-average level of $8 to little over $4 per ounce.
 
Allowing for India’s 10% import duty on gold, prices in its airfreight hub of Ahmedabad meantime ended last week at a premium of 50 cents per ounce over London, reversing an earlier steep discount as wholesale demand returned ahead of this Wednesday’s Akshaya Tritiya festival.
 
“Footfalls are still significantly lower than usual” thanks to high Indian Rupee prices, Reuters quotes a jeweler in the western Indian city of Pune.
 
“[That] is forcing industry players to give discounts on jewelry- making charges.”
 
“Overall there is a positive sentiment in the market,” claims Nitin Khandelwal, chair of the All India Gem and Jewellery Domestic Council (GJC), “so we are hoping for 15-20% growth in sales this Akshaya Tritiya compared to last year.”

Gold Price Erases Trump's Syria-Threat Spike as Russia Aims to 'Punch Stomach' of US-UK Alliance

GOLD PRICES failed to hold an overnight rally in London on Friday, dropping back to show no change for the week in Dollar and Euro terms as Moscow hit back at US sanctions and  accused a “Russophobic campaign” of staging last weekend’s chemical attack on civilians in Syria.
 
Trading back at $1337 per ounce, the gold price in Dollars held over 2% below Wednesday’s spike to 20-month highs, made as US President Donald Trump threatened to strike against Syrian government forces despite Russian military support for the regime.
 
Refusing to give the UK Parliament a vote on airstrikes, prime minister Theresa May is now “waiting for instructions from Donald Trump” alleged opposition Labour Party leader Jeremy Corbyn today, urging against “escalating an already devastating conflict” in Syria by targeting Russia’s ally Bashar al-Assad for the attack in Douma.
 
The town fell overnight to Assad’s forces, says a report on Al-Jazeera, giving the regime full control of the former rebel enclave of Eastern Ghouta.
 
The US President himself meantime hit back at ex-FBI director James Comey’s new book – including fresh claims over the “pee tape” allegedly used by the Kremlin to blackmail Trump – calling Comey an “untruthful slime ball”.
 
The Moscow stock market held onto this week’s rally, halving last week’s 10% plunge following US sanctions over Russia’s alleged role in the poisoning of an ex-spy in the British city of Salisbury.
 
The Russian Ruble also held its 5.5% rally from Wednesday’s spike to 17-month lows versus the Dollar.
 
World stock markets meantime extended their gains, taking the Euro Stoxx 50 index 1.6% higher from last Friday’s finish.
 
The Euro currency held 2 cents shy of February’s 3-year high against the Dollar, holding the gold price for investors in No.4 consumer nation Germany at €1085 per ounce.
 
Priced in the British Pound in contrast, gold showed a 0.9% loss for the week down at £937 per ounce, a 3-week low.
 
Since Donald Trump’s inauguration in January 2017, the gold price in Dollars has now risen 11.8% and gained 16.8% against the Ruble – currency of the world’s No.2 gold mining nation.
 
Adjusted for the Dollar’s trade-weighted value on the currency markets, in contrast, the non-US gold price has risen only 2.6%.
 
Trading at the equivalent of just $1227 per ounce, the non-Dollar gold price today held more than $100 lower than the US price.
 
Chart of gold priced in Dollars and adjusted for US Dollar Broad Index, rebased to Trump's inauguration day. Source: St.Louis Fed
 
Moscow has “irrefutable information that [the Douma chemical weapons attack] was another fabrication,” claimed Russian foreign minister Sergey Lavrov today.
 
A draft bill going to the Duma next week will allow Russian companies to infringe US trademarks in what one senior politician called “a punch to the stomach [of] the domination of the Anglo-Saxon and Western world…ensured precisely by the right of intellectual property.”
 
Other proposals in what State Duma speaker Vyacheslav Volodin called “tit for tat” retaliation “respond[ng] to the boorish behavior by the US” include banning the sale of titanium to aircraft manufacturer Boeing.
 
With estimates earlier this week saying that the 50 Russian tycoons named by US sanctions last Friday had already lost $12 billion on a plunge in the value of their assets, the top 3 “may have lost a combined $7.5bn” over the last week according to Reuters’ data today.

Gold Gains Most vs. 'Safe Haven' Currencies, GLD Sees No Inflow as 'Hawkish' Fed 'Hammers' Price

GOLD PRICES slipped on Thursday in London, retreating further from yesterday’s 2.5-month high against the Dollar after the US Federal Reserve forecast stronger interest-rate rises ahead and US President Donald Trump dialled down his threat to hit Russia’s ally Syria with airstrikes.
 
“Never said when an attack on Syria would take place. Could be very soon or not so soon at all!” Trump tweeted after saying Wednesday that Russia should “get ready” to see US missiles hit the forces of Bashar al-Assad, accused of attacking civilians with chemical weapons last weekend.
 
European stock markets rallied after Wall Street and Asia had fallen once more, while bond yields held little changed – and the Dollar fell back towards its lowest Chinese Yuan value of 2018 to date – despite notes from the Fed’s latest policy meeting saying that strong growth and rising inflation will lead to a faster pace of US interest-rate rises.
 
Looking at the gold price spike from Wednesday, “A flight to safety has been fuelled by US sanctions on Russia as well as deepening trade tension,” reckons Suki Cooper, head of precious metals research at London bullion market-making bank Standard Chartered.
 
“Gold is benefiting from the risk-off sentiment,” agrees analyst Simona Gambarini at consultancy Capital Economics.
 
“People are trying to hedge against worst-case scenarios.”
 
But gold’s sharpest gains so far this week have in fact come against the ‘safe haven’ currencies of Japan and Switzerland, with the metal rising 1.2% against the Yen and 1.4% against the Swiss Franc.
 
As for demand, last night’s finish in New York saw zero change for this week so far in the size of the SPDR Gold Trust (NYSEArca:GLD) – the world’s largest gold-backed exchange traded fund – with its shares in issue needing 860 tonnes of backing.
 
Chart of SPDR Gold Trust (NYSEArca:GLD) tonnes vs gold price. Source: BullionVault via ExchangeTradedGold
 
Setting a new record on Monday for shares outstanding, Germany’s largest gold ETF – the Xetra-Gold trust fund product – ended Wednesday unchanged in size.
 
Data from Bloomberg show the Xetra-Gold trust fund product swelling by almost one-half in 2016, and expanding by a further 14% over the following 15 months.
 
Wednesday’s half-per-cent rise in Dollar silver prices also left the largest silver-backed ETF unchanged in size, with the shares outstanding in the iShares Silver Trust (NYSEArca:SLV) still needing 9,959 tonnes of bullion to back their value.
 
“All participants agreed that the outlook for the economy had strengthened” and “all participants expected inflation on a 12-month basis to move up in coming months”, the US Fed meeting minutes showed Wednesday.
 
“With regard to the medium-term outlook…all participants saw some further firming of the stance of monetary policy as likely to be warranted.”
 
“Once the FOMC minutes were released [gold] was hammered,” says a trading note from Swiss refiners and finance group MKS Pamp.
 
Touching $1365 on Wednesday for only the second time since the UK’s shock Brexit referendum result of mid-2016, the gold price in Dollars traded over $20 lower per ounce by mid-morning in London on Thursday, cutting its gain for the week so far to 0.9%.
 
“Silver also propelled higher [on Weds] up to a peak of $16.8875,” says MKS, “but closed lower…following the Fed’s hawkish press release.”
 
Silver held firmer than gold prices Thursday morning, trading at $16.61 per ounce for a 1.4% Dollar-price gain from last Friday’s finish after touching an 8-week high before the Fed minutes yesterday.
 
Platinum prices meantime fell back to $925 after touching a 1-week high yesterday.
 
Palladium in contrast held almost 6.5% higher from last weekend as new US sanctions against Russian banks, companies and wealthy individuals over the Kremlin’s alleged toxic nerve agent attack on a former spy in Britain threatens to block supplies from the metal’s No.1 miner nation.