April Gold News 2015

The gold price retreated over $10 per ounce yesterday but managed to stay above the psychological $1,200 barrier.

The gold price dropped after the U.S. Fed indicated they are likely to increase interest rates in the second half of 2015.

The gold price has been boosted in recent weeks following weak economic data out of the U.S. Yesterday data confirmed U.S. GDP grow an annual rate of 0.2%.

The U.S dollar fell following the announcements and now trades at a two month low against a basket of major currencies. A lower dollar makes bullion cheap in other currencies.

The Fed’s ...

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30% of all eurozone sovereign debt is trading with a negative interest rate. The ECB’s quantitative easing program has driven yields to levels never experienced before.

Investors appear to have lost their collective minds and are now prepared to pay governments for the privilege of lending to them. 70% of all German bunds are now in negative territory, 50% of all French debt and incredibly 17% of all Spanish debt.

Not only has this never happened it’s a complete turnaround from the height of the economic crisis when yields reflected the real chance of a sovereign default. Economists and commentators ...

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China’s gold consumption rebounded in the first quarter as a relatively low gold price spurred demand.

Chinese gold demand rose 11% year on year to 326.68 metric tonnes according to the China Gold Association president Song Xin. The increase comes after gold consumption in the world’s two biggest markets, China and India, fell in 2014. India and China account for 51% of the world’s gold demand.

The increase in consumption was driven by rising jewellery sales, as investors took advantages of a lower gold price. Gold jewellery sales are forecasted to rise by over 8% in 2015.

China’s gold production ...

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It is reported that JP Morgan has expanded its physical silver holdings form 5 million ounces in 2012 to 55 million ounces today. So far it’s been a losing trade for the U.S firm with the silver price down over £8 per ounce since the start of 2012.

So why is JP Morgan accumulating so much silver? The answer may be found in Jamie Dimon’s latest letter to the company’s shareholders in which he warns of another financial crisis. Typically physical gold and silver outperform traditional assets in times of financial and political instability.

If Dimon believes another financial crisis ...

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The majority of the world’s gold is imported into Switzerland for refining and then exported to the global markets.  These import and export figures are really important as it constantly shows gold is moving from West to East.

In March gold shipments to China almost doubled to 46.4 metric tons, whilst exports to India doubled to 72.5 tons. Switzerland mines no gold, so where is all the gold coming from?  

Data from the Swiss Federal Customs Administration suggests the gold is being supplied from the UK. The UK exported 97.2 tonnes of gold to Switzerland last month up from ...

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Following a two month absence the Central Bank of Russia returned to the gold market in April by purchasing 30 tonnes of gold bullion.

Russia’s official reserves now stand at 1,238 metric tonnes and are the fifth largest in the world. The purchases come at a time when the Russian economy is under pressure due to a falling oil price and western sanctions.

According to the International Monetary Fund Russia tripled its reserves over the last decade The Russian economy has recovered in recent months with the Russian rouble gaining against the world’s leading currencies. 

Gold bullion now accounts for ...

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The gold price closed higher yesterday as concerns rose Greece is edging closer to outright default.

The yield on two year Greek government debt rose to an all-time high 28.5%, whilst the yield on the 10 year bond reached 13.3%. Such high rates indicate the market expects Greece to default on its debt obligations.

On Monday the newly elected government took the unprecedented move to formally request all state organisations, public pension funds and state owned companies transfer any spare cash to the central bank.

Eurozone finance ministers are scheduled to meet on Friday, however, it is unlikely a deal ...

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UK Chancellor, George Osborne, was warned the battle between Greece and its European creditors is nearing “crunch” point, and if mishandled could spark a new global crisis.

Osborne said the Greek crisis is now the biggest threat to the world economy and will be the main focus for central bankers and finance ministers when they meet in Washington later this week.

May will be a critical month for Greece as they attempt to pay a $1bn bill to the IMF and 1.7 bn euros in pensions and salaries. It appears the ECB and IMF are in loggerheads with the newly ...

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$50m of silver coins have been salvaged from the ocean floor from a sunken steamship. The SS City of Cairo was torpedoed by a German submarine in 1942 480 miles south of St Helena. The steamship was carrying 100 tonnes of Indian silver coins from Bombay to London.

The hoard was found by underwater salvagers Deep Ocean Search, locating the wreck after searching an area the size of London.

The coins have been returned to London and melt down with the proceeds being been split between the UK government and Deep Ocean Search.  

Famously after the SS City of ...

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A new report by the International Monetary Fund (IMF) warns of increased instability in the world economy. The IMF confirmed oil and commodity based economies have been hit hard as prices for raw materials have tumbled. Volatility in currency markets has risen with emerging economies hit the hardest.  

Financial counsellor for the IMF, Jose Vinals, confirmed the risks to the global financial system have risen since October and risks are becoming harder to identify. The IMF also warned an interest rate hike in the U.S, which is anticipated for later this year could add to instability in the global ...

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As fiat currencies become more and more unstable, many are asking “what happens next?” With China buying nearly all of the world’s mine supply many believe when the U.S. dollar fails China and Russia will back their currencies with gold. However, there may be a different outcome.

Over the weekend Lord Meghnad Desai, Chairman of The Official Monetary Financial Institution Form stated that gold should be included with the International Monetary Fund’s Special Drawing Rights to help stabilize the currency. Desai believes this is quite likely and would be easier to implement if China discloses its true official gold holdings.

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Yields on Greek 3, 5 and 10 year bonds rose yesterday after German newspaper Frankfurter Allegemeine Sonntagszeitung reported Eurozone officials are “disappointed” with the lack of progress with Athens over their debt negotiations.

The newly elected government, which is quickly running out of money to pay public pensions and salaries has decided to hold back 2.5bn euros which is due to be paid to the IMF in May and June if no agreement is struck.

“We have come to the end of the road.  If the Europeans won’t release bailout cash, there is no alternative but to default,” one government ...

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Following a multiyear investigation into possible manipulation of interest rates, Deutsche Bank, Germany’s largest financial corporation is being encouraged by financial regulators to admit their involvement and submit a criminal plea.

According to sources close to the matter authorities on both side of the Atlantic are ready to fine Deutsche Bank up to $1.5 billion. The German bank also faces an investigations into potential currency manipulation and for violating U.S. sanctions against Iran. Although, at this stage it is unclear if any employees will face criminal charges.

Apparently prosecutors are also encouraging JP Morgan Chase, Citigroup, Royal Bank of Scotland ...

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Has the financial world gone mad?

Since the crash of 2008 the financial world has become accustomed to historical anomalies such as quantitative easing, operation twist, currency wars and zero interest rates.

But just when you think you have heard it all, Switzerland issues a 10 year government bond with a negative yield i.e. investors will receive back less in 10 years than they originally invested. To date Switzerland is the first country to achieve this, however, a number of other countries have successfully issued 5 year bonds with a negative yields.

So how did we get to this point? ...

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The Easter holiday has come and gone without the European Central Bank (ECB) imposing a Cypriot style bail-in. Greece managed to meet its end of month debt obligations, but the countries debt problems persist.

Two government treasury bills are due to mature on April 14th and April 17^th totalling 2.4 billion euros, and the country needs to repay the International Monetary Fund 450 million euros on April 9^th. The newly elected government have made it clear they are teetering on the edge of insolvency.

Worryingly, total bank deposits held in Greece is now just higher than the total amount of ...

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The Icelandic government is considering taking away the power to print money from its commercial banks and giving it back to their central bank.

Currently central banks around the world have the ability to issue new notes and coins, but leave the creation money to commercial banks via the issuance of debt. This system allows commercial banks to create money with no backing and lend it out with interest.  This process is commonly known as fractional reserve lending. Many consider the system to be unfair and warn the system is unsustainable.

Central banks can influence the supply of money by ...

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