Geopolitical tensions placing pressure on gold and silver

The gold price looks set to post its second consecutive quarterly gain later today. It is currently hanging around its two-month high of $1,325.90. Silver is also ready to post its second-quarterly gain but has extended a drop in price.

Speaking of quarterly figures, asset in the SPDR Gold Trust have decreased this quarter, and have now fallen by 1.7% since the start of the year. Holdings currently stand at 785.02 tonnes this year.

Geopolitical tensions continue to place upward pressure on both the gold and silver price. The Iraq army have sent troops and vehicles to fight against the insurgents from the north of Iraq. In Ukraine there has been an outbreak of violence between pro-Russian separatists and Ukrainian forces.

The gold price posted a near-7% gain in the first quarter of the year and looks to post a 2.5% gain this quarter.

I suspect we will see a quiet few days at the start of the week as Thursday sees the ECB meeting and then the U.S. jobs data on Friday.

Clearing statistics released by the LBMA on Friday shows that the net volume of gold and silver transferred between member accounts fell during the month of May, however the number of transfers was overall unchanged.

Year-on-year comparisons show that there has been a fall in the number of transfers compared to May last year, it was a similar story for silver transfers.

China’s gold imports from Hong Kong fell to their lowest since January, in May. Last month only 52.3 metric tons were imported, 20% lower than the amount seen in April.

Getting out of the World Gold Council

In a blow for the World Gold Council, South African miners AngloGold Ashanti and Gold Fields will not renew their membership of the market-development organisation. ‘Members pay per ounce of metal produced and with all the cost-cutting we’ve seen, especially here at Gold Fields, we’ve had a look very carefully at our membership of all sorts of organisation around the world.’ said the GoldFields spokesman.

Shanghai spot gold

Chinese news sites are reporting that China may launch an international trading board in the fourth-quarter of the year in the Shanghai Free Trading zone. The move is part of the government’s desire to influence the international gold market. A spokesman for the new board said that it will adopt ‘Shanghai Gold,’ a spot gold trading mechanism.

South African platinum for sale

The Sunday Times reported yesterday that Anglo American Plc will sell some of its South African platinum mines, as part of its $4 billion asset sale plan. Platinum has climbed 0.3% an ounce and will also post a second-quarterly increase.

About the Author

Jan Skoyles is Head of Research at The Real Asset Company, a platform for secure and efficient gold investment.