In the second trading week of 2017 we had another a good week for gold. It finished the week at $1,198.30 up $25 over last week.
During last week, the dollar weakened to over $1.06 against the euro and the dollar index dropped to 101 at one point, with the media attributing that to Trump’s failure to describe his financial policies.
What appears to be happening is that the honeymoon with the Trump Presidency is over, before it began. But, as we described yesterday, such temporary news in the U.S. did not cause the buyers of gold to rush out and buy in the U.S. Most of the buying occurred in China yesterday, with no movement whatsoever in the U.S. based gold ETFs. He is more than a peppery President he is shaking up the world with his ‘tweeting’.
The rise in the gold price in dollars was in fact the fall of the dollar reflected in a higher dollar gold price, together with Chinese demand as reflected in the Yuan gold prices
On Monday of last week another very large sale of physical gold took place of 8.6 tonnes in New York and is no doubt finding its way to China. The fact that the gold price ignGF570red this sale and took prices higher, as the dollar weakened, is significant. As you know, we are currently seeing pricing power sitting in Shanghai. New York’s price reaction to the large sale of gold, confirms, again, that it does.
During the week ETF sales halted completely but we saw two small purchases into the Gold Trust. Then at the beginning of this week we saw a nearly 3 tonne purchase into the SPDR gold ETF!
We had previously stated that, “Substantial sales of gold on a daily basis are needed for New York to control the gold price”
It does appear that the developed world’s gold world media has not yet noticed these changes. We feel that they are the most important structural changes the gold world has seen since 1971. Please note, you’re reading it here first!
If we are right and the pricing power now resides in Shanghai, we have to completely adjust our gold price reasoning.