Daily Market Update

Gold Gains Over 7% Between January And April

Today’s AM fix was USD 1,283.00, EUR 924.15 and GBP 759.04 per ounce.
Yesterday’s AM fix was USD 1,292.00, EUR 934.67 and GBP 768.32 per ounce.

Gold fell $5.70 or 0.44% yesterday to $1,290.40/oz. Silver slipped $0.30 or 1.54% yesterday to $19.19/oz.

There was little volatility in the gold price yesterday following confirmation that the U.S. Federal Reserve is to continue scaling back its monthly bond buying program due to the perception of stronger U.S. economic growth over the near term.

This view contradicted the recent data slightly as yesterday also saw the release of first quarter U.S. GDP growth figures, which showed that the U.S. economy only grew at an annualised 0.1% over the 3 months from January to March. It remains to be seen if the Fed’s optimism is realistic.

Both the gold and silver prices have retreated slightly this morning in Asian trading and gold is now residing above $1,280/oz, with silver likewise weaker just above $19/oz. Over the first four months of 2014, gold has risen by more than 7% in U.S. dollar terms, while silver is 1% lower over January-April.

On a technical basis, current support for gold now resides around $1,284/oz and $19/oz for silver, which is where both metals are currently trading. Gold has recently been trading in a tight range between $1,280/oz and $1,320/oz and a more volatile breakout of the price would be expected to occur sometime this month, since the gold price does not classically stay in such a tight range for very long.

Many stock markets across the world are closed today due to the 1st May international labour holiday, including Germany, France, China, Hong Kong and Singapore. Therefore, some Asian gold markets were also closed today.

LBMA Release London Precious Metals Clearing Statistics for March
The London Bullion Market Association (LBMA) yesterday announced monthly gold and silver clearing statistics for the London Market.

Monthly statistics are released about one month after the reporting month. For March, the average trading volume of gold increased by 6.2% to 1.9m ounces. Since the gold price rose in March, the value of gold transactions also rose strongly, increasing by 9.1% to an average daily value of $25.3 billion, the highest since August 2013, while the average daily number of transfers was also 5% higher than in February.

The same data for silver was a lot weaker due in part to weakness in the silver price in March. The average daily trading volume of silver fell by a significant 27.8% to 134 million ounces from an admittedly higher than normal February figure of 185.7 million ounces. This brought down the average daily value of transactions by 28.2% to $2.78 billion, while the average daily number of transfers dropped 14% to 779.

In March, the average daily transfer size for gold was 4,000 ozs and for silver 172,179 ozs.

The London clearing statistics are sourced from the London Precious Metals Clearing Limited (LPMCL), which is made up of six investment bank members, namely, JP Morgan, HSBC, ScotiaBank, UBS, Barclays and Deutsche Bank. Even though Deutsche Bank is exiting the gold and silver Fixing panels this month, it has not announced any plans to exit membership of the precious metals clearing company.

For a detailed discussion of the LBMA/LPMCL precious metals clearing data and methodology, see this GoldCore Blog – LBMA Beyond the Smoke and Mirrors from August 2013.

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Mark O'Byrne
Executive Director


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