Welcome to a very brief overview of the recent performance in the markets. The essentials are captured in the table below and each week we will show a chart of interest.
Since our most recent market round-up the gold price has effectively undulated in a narrow range between $1,445 and $1,480 (intra-day prices) – a virtually horizontal profile, but with a slight downward bias. Silver has traded similarly, between $16.62 and $17.23 and the gold:silver ratio has accordingly held broadly steady between 85.5 and 86.5. Gold is continuing to concentrate on the financial and political backdrop. To that end the relative weakness in equities towards the end of last week (and with the U.S. markets quieter because of the Thanksgiving holiday) gave gold some upward impetus, especially when taken with the exacerbation of tensions between the United States and China after the former passed legislation in support of the Hong Kong populace. This situation has become increasingly tense over the weekend with the Chinese Foreign Ministry this morning (Monday 2nd December) stating that this legislation means that it will suspend the review of requests from U.S. military vessels to visit Hong Kong.
This latter development has not had much effect on gold, however, with the markets more interested in the strong Purchasing Managers’ numbers from China, released today and which posted 50.2, the first time since April that it has been above 50 and which came as a surprise after the faltering performance of recent months. Gold Is also labouring under technical chart-related pressures, with spot prices below the key moving averages.
The physical market remains quiet and the major central bank buyers are slowing their purchases. The latest figures from the U.S. Mint show Gold Eagles sales in November of 15,000 ounces, taking the total for the year to date to 150,000 ounces or 4.8 tonnes, for cumulative expenditure of approximately $204M, a 33% reduction over expenditure in the first eleven months of 2018. Silver Eagle expenditure over the period was $239M, 17% higher than the expenditure on Gold Eagles and just 1% higher than in the equivalent period of 2018.
Thought for the week
The major gold ETFs have encoded a $15Bn net on flow so far this year.
Gold and Silver Eagles; approximate monthly expenditure, $M