Weekly gold and silver market wrap - 10 Feb 2017

With most people being busy during the week we thought we'd do a weekly gold and silver market wrap which can quickly and easily be scanned through to see how precious metals are doing. After all, we all like to see if our wise decisions are bearing fruit.

This is a work in progress. We aren't professional traders, just ordinary people protecting our families interests.

Since all precious metals are priced in USD, in the absence of major demand or price manipulation by the London gold and silver fixing banks (which Deutsche Bank admitted to in April 2016), whatever happens to the USD will have a direct impact on the price of these metals. Think of a see-saw with the USD on one end and gold or silver on the other.

If the USD goes down, the price of gold and silver will increase since more dollars are needed to buy the same troy ounce of gold or silver. If your currency "strengthens" (i.e. goes up) vs the USD, the price of gold and silver will go down in your currency.

Many look at the price of gold and silver but few look at what their currencies are doing relative to the USD. Conduct a little experiment. Watch what your currency is doing against the USD and you’ll be able to tell if the gold price has increased or decreased in your currency.

Don’t confuse any currencies weakness for Gold strength.

Here are some weekly news items centered around the precious metals.

• London’s centuries old gold market is entering a new era of transparency by revealing how much gold is held in vaults in and around the city – including those controlled by the Bank of England.

  • The LBMA (London Bullion Market Association) will provide data on how much gold is traded in London’s square mile on a daily basis as there are currently no figures for over the counter trades, which are estimated at $ 26B a day – REALLY, no figures for $ 26B worth of daily trading – Very hard to believe.

  • By providing this info, the LBMA, whose members include HSBC and JP Morgan, hope to head off a challenge and persuade regulators that banks trading in bullion shouldn’t have to face more onerous funding requirements.

Read what you will into this, but if regulators agree, all banks will use this loophole to avoid new onerous funding requirements.

• Business Insider reported on Tuesday that “The Pound is Tumbling” and was pushed lower by renewed strength in the USD thanks to market jitters. A tumbling pound means higher gold and silver prices in UK pound terms. The pound has been tumbling against the USD for about 10 years now, so this isn’t really anything new.

• Kitco reports the latest trade data from the CFTC (Commodities and Futures Trading Commission) show that hedge funds continue to trickle into gold amidst growing US political uncertainty. We aren’t really sure why there would be political uncertainty as Trump made his intentions known on his campaign trail. Perhaps we are so used to politicians saying one thing and doing the opposite that we have trouble understanding this concept. If all politicians did what they promised their voters, we suspect the world wouldn’t be in such a mess and a better place.

• CBS News reported that China’s new boom export market is fake gold coins.
  Fake gold and silver coins and bars aren’t anything new but as the underlying metal prices rise the incidence of fake coins will increase. Most gold and silver owners know this has been happening for many many years now and this will not be going away so be vigilante when purchasing online or from individuals. Visit Bullion-Trader for information on verification tests. Don't get scammed with fake gold or silver coins or bars.

My parting question for the weekend. Is ultrasonic testing the only way that the average person can verify gold and silver products purchased from individuals or online, so that they don’t get scammed buying these new high quality fakes?

Have a good weekend guys and gals.