GoldCore

The Easter weekend is almost upon us. As you start to unwind and begin to enjoy the long weekend you might be pleased to note gold’s performance this week. At the time of writing gold has posted near double-digit gains during a busy day of US economic data releases. 

 This is an important day from a technical point of view, given it is the final day of trading this week, month and quarter. Gold’s performance comes despite data releases that indicate the US economy is faring better than expected. 
In times gone by one would have reasonably expected gold to falter at the merest hint of stronger-than-predicted data. But we are now seeing a sort of teenager-esque response from gold when it comes to events that one might have previously expected to see a reaction to. It seems to shrug it's shoulders as if to say ‘yeah? And?’. 
It goes to show that something we have long waited for is perhaps starting to come to light…physical and non-speculative demand for gold is beginning to bear a heavier weight on price action than it has previously. 
This has been coming for a while. After all, ETF outflows have been on a tear for the past nine months, but this has had little impact on the price of gold.
Much of this we can attribute to central bank buying especially by China. Conversations with our fellow LBMA members in recent days have confirmed our suspicions that physical gold is being snapped up by the big investors in the East. 
Of course, as I mentioned last week, we fully expect central bank demand for gold to continue, and grow. Given the decision by the EU last Thursday to propose the use of frozen Russian Central Bank assets to support Ukraine, this will have surely fired a spark amongst central bankers that they need to secure their assets in ways that cannot result in similar outcomes. 
Gold is the only answer. 
And why is it the only answer you might ask? Well let us explain. In this short 4 minute video We explain why gold has maintained its status over thousands of years, as the money of choice. We ask why, of all the metals that can be taken out of the ground, is gold the one that has prevailed as the ultimate currency. 
And just before I go, please note our Easter trading hours. We are closed tomorrow (Friday 29th March) and will reopen on Monday 1st April at 8am.
Have a very happy Easter
 

With the gold price making headlines once again it can sometimes be a bit too easy for silver to disappear into the background. But this is when it’s even more important to pay attention to the silver price, given its relationship with the yellow metal. So it was with great interest that I spoke to David Morgan, the Silver Guru himself, on GoldCore TV.
Astonishingly it’s been nearly two years since we last spoke to David, so as you can imagine there was a lot of ground to cover in this short 30 minute interview. From the gold and silver ratio, to the decoupling of the silver price from gold, to the shortage of silver through to the role of silver as a metal of war. 
 We talk about whether or not silver has been “disenfranchised” as money over the past century in favour of gold. And also take a look at how industrial demand for silver from sectors like solar panels will continue to increase dramatically.  So will it be industrial demand or investment demand that serves the silver market best in the future? And is it still the metal of war?  We look at geopolitical instability and concerns about fiat currencies as potential catalysts for renewed interest in silver. 
As ever let us know your thoughts on the interview. Do you agree with David’s outlook on silver? Has this interview got you thinking about your next silver investment? Let us know!

Yesterday gold made headlines as it sailed past the psychological barrier of $2,100. Why did this happen?
I spoke to chart expert Patrick Karim, to find out.
In this brief 20-minute chat Patrick walked me through the charts, with a particular focus on this leap in the gold price, we also cover what it is that he’s expecting to see in the coming weeks. He reminds us why daily-moves should not be the focus of any gold investor, and how to take these moves with a pinch of salt.
The discussion revolves around charts and technical analysis but even if you’re new to this area, Patrick has a great way of breaking down his work. So anyone who is interested in markets and prices can learn something.
As ever please let us know your thoughts and comments, we always love to read them. And if you have any questions for future guests, then send them our way.

Stay tuned, video coming soon.

In 2023 gold demand was the highest on record at 4,899t. The increased desire to own gold should not be a surprise, after all gold has been shown to act as a portfolio preserver in times of economic, geopolitical and financial distress. And we are certainly in those times right now. 
But we also find ourselves in concerning, environmental times. It is incumbent upon us to consider the impact of our investments on the wider landscape. Gold has been around for millenia but continues to step up to the plate when it comes to meeting investors’ needs and concerns, both in terms of portfolio preservation and sustainable investing. 
Sustainability is taken very seriously by the gold industry, across the supply chain. The Responsible Gold Mining Principles address all the material ESG risks associated with gold mining. And further up the supply chain all LBMA accredited refiners have to follow the Responsible Gold Guidance to ensure that they have appropriate responsible sourcing procedures in place.
No bullion dealer worth their salt will be sourcing newly refined bars or coins that haven’t come from an LBMA accredited refiner or mint. So make sure you look out for that when buying gold bullion. It is worth noting however that ‘grandfathered gold’, the gold refined before 2012 that is held in bullion bank vaults, central bank vaults, exchanges, is not required to have a determination of origin.
 It takes very little energy to keep gold (it does not require certain storage conditions) or to trade it. It is not as if once traded it is consumed, instead it will always exist. For example, the American Eagle you bought last week might not be from newly mined gold. Instead it might be one of the first released in 1986 and it could contain gold from hundreds of years prior. 
Jim Rogers and his Survival Plan for the coming Debt Collapse
The fact that we are talking about a product that once mined will last thousands of years indicates that it is a sustainable investment. This is because gold is rarely destroyed and so all of the gold ever mined still exists today. And it exists in its original form – as gold – and so is still as investable and as practical as it was when it was originally mined. 
Gold has always been recycled, and in the modern age recycled gold is becoming increasingly important. Overall demand for gold  was so high in 2023 that recycled gold supply climbed by 9%. Over 25% of gold bought this year will have come from a recycled source, this is significant given it is over 90% less carbon intensive than sourcing mined gold. 
It is rare in this day and age to point to a thousand year old asset that takes such little energy to preserve but instead does all the preserving for you. 
This article was published this week in Phoenix Magazine’s Sustainable Investing feature, which GoldCore was proud to sponsor.

It’s rare that I get the opportunity to interview somebody who is described as a financial markets guru, a commodities legend, the best selling author of multiple books, and above all else, a true gentleman. But, it is even rarer that I get to do it three times. Luckily for me that is the case when it comes to Jim Rogers, who I spoke to earlier this week. 
Jim first bought gold in 1971 when it was still illegal for Americans to buy gold. Since then he has been on quite a journey in terms of his portfolio and making calls about where to store his ever-growing wealth. Today he is a fountain of historical knowledge and incredible wisdom, yet remains humble about the fact that even he cannot expect to know how things are going to play out. 
With echoes of our conversation with Marc Faber, Jim reminds us why we hold gold: We don’t do it to make a quick profit as one might expect to in the stock market, instead we do it so we can invest in the stock market and still sleep at night. We buy gold for insurance, for peace of mind. 
I always enjoy my chats with Jim, but I think this might be favourite one so far. Let me know what you think. 
 

Earlier today we spoke to one of our favourite chart experts, Gareth Soloway. 
Since we last spoke to Gareth gold has hit an all time high, silver hasn’t done very much at all and all the while cinder kegs across the world keep sparking.  
We took a few minutes to speak to Gareth about where he expects gold to go next, if silver is going to play catch-up any time soon and what daily close in gold he has his eye on. We also managed to squeeze in some chat about the US economy and crypto. 
Let us know if you think he’s got it right when it comes to changing views on silver, and if you agree with his forecast for gold. 
As ever please let us know your thoughts and comments, we always love to read them. And if you have any questions for future guests, then send them our way. 

Earlier today we spoke to one of our favourite chart experts, Gareth Soloway. 
Since we last spoke to Gareth gold has hit an all time high, silver hasn’t done very much at all and all the while cinder kegs across the world keep sparking.  
We took a few minutes to speak to Gareth about where he expects gold to go next, if silver is going to play catch-up any time soon and what daily close in gold he has his eye on. We also managed to squeeze in some chat about the US economy and crypto. 
Let us know if you think he’s got it right when it comes to changing views on silver, and if you agree with his forecast for gold. 
As ever please let us know your thoughts and comments, we always love to read them. And if you have any questions for future guests, then send them our way. 

Earlier today we spoke to one of our favourite chart experts, Gareth Soloway. 
Since we last spoke to Gareth gold has hit an all time high, silver hasn’t done very much at all and all the while cinder kegs across the world keep sparking.  
We took a few minutes to speak to Gareth about where he expects gold to go next, if silver is going to play catch-up any time soon and what daily close in gold he has his eye on. We also managed to squeeze in some chat about the US economy and crypto. 
Let us know if you think he’s got it right when it comes to changing views on silver, and if you agree with his forecast for gold. 
As ever please let us know your thoughts and comments, we always love to read them. And if you have any questions for future guests, then send them our way. 

Happy New Year to you all. This is our first update of 2024. What a way to start a year given gold ended 2023 with its first annual gain in three years, achieving around a 13% climb.
Depending on what you read and who you listen to there were three commonly cited reasons as to why gold really made 2023 shine. 
In no particular order:
Geopolitical instability  Central bank gold purchases FOMC Rate Decisions We’re only four days into the New Year and already two of those are making sure that they will also be key drivers for 2024 as well. We are of course talking about the release of the FOMC’s December minutes and the cinder kegs that keep appearing in the Middle East. 
Yesterday the minutes of the FOMC December meeting were released. Any expectations of a cut in rates starting in March were quickly dampened and realised to be unrealistic, with the minutes instead suggesting that rates will remain high ‘for some time’. 
With markets now having to amend their thinking to the likely chance that rate cuts won’t come until the second-half of the year many will be wondering how this will impact the price of gold. After all, traditional thinking tells us that gold should struggle under a period of rate hikes and tight monetary policy. If a 13% climb is gold ‘struggling’ then we’re looking forward to seeing how it does as interest rates come down. 
FOMC is losing its touch 
As ever, nothing happens in a vacuum. Gold does not only respond to the touch of the FOMC. If anything, it has been becoming desensitised to such announcements. Whilst we watch to see how it reacts to tomorrow’s non-farm payrolls data tomorrow, the reality is that in the medium to long-term gold takes its cue from a number of sources, and the weight of those sources on the gold price has been shifting in recent months. 
Chris Vermeulen on Gold: This Is A Super Cycle At Play
One of those sources is geopolitical tensions, which have already been impacting the price of gold this week. Whether it’s the bombing of a grave in Iran, Israel targeting Hamas members in Lebanon, or just the ongoing carpet bombing of Palestine, no-one is looking at the Middle East and waiting for it all to blow over. Gold has held strong this week, in part thanks to these very recent events.
The events ongoing today have had a long build up (well before October 7th) and gold has reacted accordingly. It has ultimately taken a steady climb, indicating markets’ increasing awareness that it really is a safe haven. Israel’s mission to obliterate Hamas is likely to engulf the Middle East, and draw in the rest of the world for some time to come. Stable times these are not. 
Central Banks Will Continue to Shop 
Luckily not all central banks are focusing on short-term issues such as monetary policy and funding wars. Instead, there are central banks who have been playing the long game as well, and have spent significant time adding gold to their reserves. This is the third factor that helped the gold price, in 2023. 
There is no indication that this will let up in 2024. Some central banks, such as Poland have made it very clear the quantities that they expect to buy up. Other banks, such as China, do not feel the need to make a song and dance about it. We fully expect to see further banks add to their gold reserves in the coming year as they begin to prepare for an increasingly fractious world. 
David Hunter
Later this week we will be speaking to David Hunter, of Contrarian Macroadvisors. We last spoke to him in 2022, when he made some punchy predictions about stock market performance. Send any questions you have for him to @GoldCore on the platform formerly known as Twitter. 

Happy New Year to you all. This is our first update of 2024. What a way to start a year given gold ended 2023 with its first annual gain in three years, achieving around a 13% climb.
Depending on what you read and who you listen to there were three commonly cited reasons as to why gold really made 2023 shine. 
In no particular order:
Geopolitical instability  Central bank gold purchases FOMC Rate Decisions We’re only four days into the New Year and already two of those are making sure that they will also be key drivers for 2024 as well. We are of course talking about the release of the FOMC’s December minutes and the cinder kegs that keep appearing in the Middle East. 
Yesterday the minutes of the FOMC December meeting were released. Any expectations of a cut in rates starting in March were quickly dampened and realised to be unrealistic, with the minutes instead suggesting that rates will remain high ‘for some time’. 
With markets now having to amend their thinking to the likely chance that rate cuts won’t come until the second-half of the year many will be wondering how this will impact the price of gold. After all, traditional thinking tells us that gold should struggle under a period of rate hikes and tight monetary policy. If a 13% climb is gold ‘struggling’ then we’re looking forward to seeing how it does as interest rates come down. 
FOMC is losing its touch 
As ever, nothing happens in a vacuum. Gold does not only respond to the touch of the FOMC. If anything, it has been becoming desensitised to such announcements. Whilst we watch to see how it reacts to tomorrow’s non-farm payrolls data tomorrow, the reality is that in the medium to long-term gold takes its cue from a number of sources, and the weight of those sources on the gold price has been shifting in recent months. 
Chris Vermeulen on Gold: This Is A Super Cycle At Play
One of those sources is geopolitical tensions, which have already been impacting the price of gold this week. Whether it’s the bombing of a grave in Iran, Israel targeting Hamas members in Lebanon, or just the ongoing carpet bombing of Palestine, no-one is looking at the Middle East and waiting for it all to blow over. Gold has held strong this week, in part thanks to these very recent events.
The events ongoing today have had a long build up (well before October 7th) and gold has reacted accordingly. It has ultimately taken a steady climb, indicating markets’ increasing awareness that it really is a safe haven. Israel’s mission to obliterate Hamas is likely to engulf the Middle East, and draw in the rest of the world for some time to come. Stable times these are not. 
Central Banks Will Continue to Shop 
Luckily not all central banks are focusing on short-term issues such as monetary policy and funding wars. Instead, there are central banks who have been playing the long game as well, and have spent significant time adding gold to their reserves. This is the third factor that helped the gold price, in 2023. 
There is no indication that this will let up in 2024. Some central banks, such as Poland have made it very clear the quantities that they expect to buy up. Other banks, such as China, do not feel the need to make a song and dance about it. We fully expect to see further banks add to their gold reserves in the coming year as they begin to prepare for an increasingly fractious world. 
David Hunter
Later this week we will be speaking to David Hunter, of Contrarian Macroadvisors. We last spoke to him in 2022, when he made some punchy predictions about stock market performance. Send any questions you have for him to @GoldCore on the platform formerly known as Twitter. 

Henry Kissinger Image Source: University of Michigan, Gerald R. Ford School of Public Policy
Charlie Munger Image Source: Gerard Miller | CNBC For much of November gold has been on a tear and this week investors have sent it way up, punching past $2000. Will these giddy heights of over $2,000 be how gold chooses to see out month-end? At the time of writing we cannot be sure. 
Yesterday prices did soften ever so slightly but the drivers that have affected gold this month (and prior) are ever-present. In all likelihood gold took a bit of a breather thanks to FOMC comments suggesting the Fed would not look to start cutting rates until after Q1, next year. Currently the ECB is odds-on to be the first central bank to cut rates, with the market pricing in a cut from the ECB in the first quarter of 2024, and the Fed in Q2 2024. When interest rates are low, it creates a more attractive environment for investors to buy non-yielding assets such as gold. 
Whilst we are very bullish that a gold price in excess of $2,000 will soon be ‘the norm’ it is very likely that today will see a routine round of profit taking as investors cover their long positions and in doing so offset their positions with a sell order. 
  Profit taking or not, all the reasons as to why gold has been storming ahead still remain. Even while inflation appears to be faltering and the US economy is still doing well, there are still clear signs that we may witness sticky inflation and tepid growth. For traditional portfolios, the “stagflation” scenario—in which stocks experience price pressure but bond payouts decrease over time—can be fatal. And this is just one of many strong reasons why you need to hold gold in your portfolio. 
Gold is snapped up in times of low interest rates, high inflation and global turmoil. And where are things at present? Central Banks are already forecasting when they will start cutting rates, but inflation is clearly still present across a number of industries, currencies are flip flopping and we have a number of fires popping up around the world in the form of war and political posturing between nations. A stable world this is not.
Does a hold over $2,000 matter?
Psychologically, finishing the month above $2,000 is a big deal. It shouldn’t be, but it is. Afterall the $2,000 mark is just one price, in one currency, and gold is a global currency, traded around the world in a number of currencies and you might not even be buying in dollars.  
But dollars do still rule the world and the $2,000 price acts as a placeholder for those trading gold. Before you worry where gold will close today, or even in a year, we are reminded of a quote from the late and great Charlie Munger:
Charlie Munger Steps Out 
Obviously Charlie Munger was no fan of gold or silver, stating that he had no interest in it. There is little interest paid by Berkshire Hathaway towards any kind of ‘alternative asset’ and such is the wide-spread mainstream respect for Charlie Munger and Warren Buffet that I suspect this approach has resulted in many institutional investors avoiding alternative assets such as gold and silver. But, there was once a time when Berkshire Hathaway stunned the world with a hefty physical silver purchase. 
Back in 1998 the company released a press release that stated:

“The company owns 129,710,000 ounces of silver. Its first purchase was made on July 25, 1997 and its most recent purchase was made on January 12, 1998.  During 1998, Berkshire has accepted delivery of 87,510,000 ounces in accordance with the terms of the purchase contracts and the remaining contracts for 42,200,000 ounces call for delivery at varied dates until March 6, 1998. To date, all deliveries have been made on schedule. “

As Charlie Morris explains, “As rumours of their purchase spread, the price took off, only to give much back after the announcement a few months later…They sold their silver hoard at a modest profit and later regretted the trade, probably because it went against their ideology to “never bet against America” and their establishment credentials.”
Kissinger and Munger leave at the right time
Henry Kissinger also passed away this week, clocking out at 100 years old. Like Munger he was born into a world where gold was still king of the international monetary system. But also like Munger he hugely benefited from (and was partly responsible for) the dollar hegemony that arose as a result of the 1971 decision to unpeg the US dollar from gold. 
There is plenty one could say about both of these two men. Regardless of whether you agree with their approach to investment or politics, there is still much to be learned from them. 
Patrick Karim, Charts and Gold’s Next Breakout
 
Both Kissinger and Munger (through Berkshire Hathaway) were two of the biggest supporters of the superpower that is the US; Berkshire Hathaway is run with the ethos, “you don’t bet against America” and Kissinger was arguably one of the architects of the tower that the United States finds itself atop of, today. 
Both men appear to have bowed out just at the beginning of what is about to be the next shift in the global political and economic order. As Marc Faber said back in November:
“…we have a world that is becoming divided between the wealthy, developed Western countries under the hegemony of the United States and their allies like Canada and Australia, UK and Europe, and then you have the BRICS countries that are becoming larger and have economically an increasingly large weight in the world and politically more influence,”
 

Overnight gold stunned markets by obliterating resistance levels and rocketing up to a new all-time high of $2,148.99. 
As well as a new level we might also have seen a new standard in volatility being set as the yellow metal experienced $100 intraday swings. 
This morning gold has calmed itself down a bit. But make no mistake, we are in a new era for the gold price. 
What drove it so high? As always, it’s rarely down to one reason. Gold has had a stellar year due to a confluence of factors. And the reasons for last night’s pop are really no different. 
The US Dollar’s 3.5% fall since November has given non-USD buyers the upper hand when it comes to gold purchases.  No one should be surprised that gold climbs when there are wars raging. It’s probably the oldest reason in the book for buying gold. When there is geopolitical uncertainty citizens, investors and central banks alike put their financial allegiance into gold. This year, with Ukraine and the Middle East showing little let-up, the reason to hold gold is stronger than ever.  And many might point to the Russian sanctions as to why gold has become popular amongst central banks, but data quite clearly shows that demand was strong prior to Russia’s invasion of Ukraine. This is down to countries slowly turning away from US dollar reliance and instead to an independent currency, such as gold. Finally (a less fun one to explain) gold has also been given room to perform thanks to the drop in real rates which have dropped by 50 basis points since the peak in October. Markets are now pricing in up to 4 cuts from The Fed next year. Will other Central Banks be far behind? At the time of writing gold is now back down around $2,067, so did gold run ahead of itself, given it’s now backed off from its all-time high? Perhaps, but the move did happen during a low liquidity trading session which gives it more capacity for bigger swings.
However, the tone has now been set for what we can expect from gold. Given much of its performance this year has been despite the lack of ETF buying, we expect to see an even stronger, more sustained performance when investors turn back to ETFs; something we believe is inevitable given the growing sentiment around owning the yellow metal. 
So whilst many might have seen the price this morning and wondered if they’ve missed the boat we would argue the boat is very much still in the dock but be prepared for some choppy months ahead. 

Henry Kissinger Image Source: University of Michigan, Gerald R. Ford School of Public Policy
Charlie Munger Image Source: Gerard Miller | CNBC For much of November gold has been on a tear and this week investors have sent it way up, punching past $2000. Will these giddy heights of over $2,000 be how gold chooses to see out month-end? At the time of writing we cannot be sure. 
Yesterday prices did soften ever so slightly but the drivers that have affected gold this month (and prior) are ever-present. In all likelihood gold took a bit of a breather thanks to FOMC comments suggesting the Fed would not look to start cutting rates until after Q1, next year. Currently the ECB is odds-on to be the first central bank to cut rates, with the market pricing in a cut from the ECB in the first quarter of 2024, and the Fed in Q2 2024. When interest rates are low, it creates a more attractive environment for investors to buy non-yielding assets such as gold. 
Whilst we are very bullish that a gold price in excess of $2,000 will soon be ‘the norm’ it is very likely that today will see a routine round of profit taking as investors cover their long positions and in doing so offset their positions with a sell order. 
  Profit taking or not, all the reasons as to why gold has been storming ahead still remain. Even while inflation appears to be faltering and the US economy is still doing well, there are still clear signs that we may witness sticky inflation and tepid growth. For traditional portfolios, the “stagflation” scenario—in which stocks experience price pressure but bond payouts decrease over time—can be fatal. And this is just one of many strong reasons why you need to hold gold in your portfolio. 
Gold is snapped up in times of low interest rates, high inflation and global turmoil. And where are things at present? Central Banks are already forecasting when they will start cutting rates, but inflation is clearly still present across a number of industries, currencies are flip flopping and we have a number of fires popping up around the world in the form of war and political posturing between nations. A stable world this is not.
Does a hold over $2,000 matter?
Psychologically, finishing the month above $2,000 is a big deal. It shouldn’t be, but it is. Afterall the $2,000 mark is just one price, in one currency, and gold is a global currency, traded around the world in a number of currencies and you might not even be buying in dollars.  
But dollars do still rule the world and the $2,000 price acts as a placeholder for those trading gold. Before you worry where gold will close today, or even in a year, we are reminded of a quote from the late and great Charlie Munger:
Charlie Munger Steps Out 
Obviously Charlie Munger was no fan of gold or silver, stating that he had no interest in it. There is little interest paid by Berkshire Hathaway towards any kind of ‘alternative asset’ and such is the wide-spread mainstream respect for Charlie Munger and Warren Buffet that I suspect this approach has resulted in many institutional investors avoiding alternative assets such as gold and silver. But, there was once a time when Berkshire Hathaway stunned the world with a hefty physical silver purchase. 
Back in 1998 the company released a press release that stated:

“The company owns 129,710,000 ounces of silver. Its first purchase was made on July 25, 1997 and its most recent purchase was made on January 12, 1998.  During 1998, Berkshire has accepted delivery of 87,510,000 ounces in accordance with the terms of the purchase contracts and the remaining contracts for 42,200,000 ounces call for delivery at varied dates until March 6, 1998. To date, all deliveries have been made on schedule. “

As Charlie Morris explains, “As rumours of their purchase spread, the price took off, only to give much back after the announcement a few months later…They sold their silver hoard at a modest profit and later regretted the trade, probably because it went against their ideology to “never bet against America” and their establishment credentials.”
Kissinger and Munger leave at the right time
Henry Kissinger also passed away this week, clocking out at 100 years old. Like Munger he was born into a world where gold was still king of the international monetary system. But also like Munger he hugely benefited from (and was partly responsible for) the dollar hegemony that arose as a result of the 1971 decision to unpeg the US dollar from gold. 
There is plenty one could say about both of these two men. Regardless of whether you agree with their approach to investment or politics, there is still much to be learned from them. 
Patrick Karim, Charts and Gold’s Next Breakout
 
Both Kissinger and Munger (through Berkshire Hathaway) were two of the biggest supporters of the superpower that is the US; Berkshire Hathaway is run with the ethos, “you don’t bet against America” and Kissinger was arguably one of the architects of the tower that the United States finds itself atop of, today. 
Both men appear to have bowed out just at the beginning of what is about to be the next shift in the global political and economic order. As Marc Faber said back in November:
“…we have a world that is becoming divided between the wealthy, developed Western countries under the hegemony of the United States and their allies like Canada and Australia, UK and Europe, and then you have the BRICS countries that are becoming larger and have economically an increasingly large weight in the world and politically more influence,”
 

The double figure pop up in gold on Tuesday was more to do with weakening of the US dollar, than rampant gold demand itself. The significant drop in the fiat currency was largely thanks to the release of October’s CPI report. Echoing that of the previous month, the report showed weaker growth and lower than expected inflation. This has left some calling for the Fed to not only pause its rate hikes but also to do so earlier than expected. The very modest drop in the gold price yesterday was thanks to a small recovery in the US Dollar, the fact that gold barely dropped in price just shows how much support it continues to pull in from CPI and PPI reports. 
US avoids Shutdown…again…
In news that will come as no surprise to anyone, the US government has ‘narrowly’ avoided a shutdown after the Senate passed a bill yesterday in a ‘race against the clock’ to pull a deal together. We could bore you with the minutiae of the deal but that would then set a precedent to explain the deal every time this happens, and it happens a lot so…we’re not going to start something we’re not going to finish. 
Christmas Credit Crunch
As ever it makes sense to look at what is happening behind the official data releases that are much hyped by central banks and advisers. We are of course referring to the Federal Reserve SLOOS report (Senior Loans Officer Opinion Survey) which indicated that there is an ongoing tightening in lending standards. Great! You may cry, they should be more responsible! Yes, absolutely…perhaps. But the US economy (like all major economies) is one built on the back of credit. If these cautious lending practices turn out to mean a drop in actual lending, then that could point to a credit crunch and so a recession. Quite the bookend to a year that started with tumultuous activity in the banking sector. 
  The UK isn’t inflating as fast as it was, but it’s also not doing anything at all… 
In the UK there was apparently cause for celebration when inflation figures for October showed that the growth in prices was starting to slow down. This preceded the growth figures which showed that whilst things were better than the 0.1% predicted slowdown in the economy, the UK is looking at a protracted period of stagnation and a near horizontal growth line. 
Currency Wars – done and dusted?
Of course, the big news in the US has been the meeting between President Biden and Xi Jinping (standby for the fallout from the former calling the latter a ‘dictator’ immediately after said meeting). For many years the two countries of which the men preside over were the biggest players in Currency Wars. A term that dominated economic news prior to the pandemic. The term draws fewer headlines. Currency wars, as long as fiat rules, will always exist but we are in a very clear ‘lull’ in the long and protracted battle that has raged between the US and China for many years. 
Patrick Karim, Charts and Gold’s Next Breakout
 
At the moment there is a general sense that there is no immediate threat to the US Dollar. It is still the reserve currency of choice, and China still chooses to hold its own reserves in dollars. Whether due to the timing of the report or just a shift in outlook, the Treasury’s bi-annual currency report did not reference China as a ‘currency manipulator’ of which it has done previously. 
This is not to say that we can label past accusations of currency manipulation by the Americans towards China as contretemps of times gone by. Instead we would suggest that right now it isn’t front and centre of currency management. China has always been one to take its time with any policy. It has placed heavy focus and significant resources on shoring up its reserves with gold and stabilising the renminbi rather than weakening it against competitor currencies. Given how weak China’s economic growth has been this past year, and Trump’s possible re-election, we suggest that both countries will return to the battlefield as economic growth becomes a major focus for each of them.

The big news in gold is two-fold right now; gold hit new all-time highs in several currencies and central bank demand for physical gold remains strong hitting a year-to date record in Q3 this year. 
Gold at $2,000? 
So whilst the headlines were all about dollar-denominated gold showing us that it’s still destined for levels north of $2,000 the real news is about other currencies and gold. Ahead of yesterday’s FOMC announcement the price of the yellow metal hit new all time highs in pretty much most of the major non-dollar currencies. This includes the Euro, British Pound, Chinese Yuan and Japanese Yen. 
To give more weight to the argument that the dollar is becoming increasingly less significant to the price of gold, the metal barely blinked following the FOMC’s announcement yesterday that it would continue to hold rates. 
At the press conference following the FOMC meeting Chairman Powell did confirm the Committee’s bias towards tightening, prompting gold to fall back slightly (to a five-day) low but it quickly recovered to levels seen prior to the announcement. 
We continue to see a breakdown in the negative correlation between gold and bond yields. This is most likely because investors are growing increasingly concerned about the fiscal outlook of the U.S. government and its mounting debt, which has topped $33 trillion.
We believe factors beyond the control of the US and Federal Reserve are now placing more weight on gold demand and the price of gold, than previously. Most obvious is events in Gaza but there is also the small issue of central banks everywhere still trying to keep their economies afloat, and another looming energy crisis. 
Bank of England – will they? Won’t they? They won’t.
Speaking of economic struggles and central bank decisions, all eyes are poised on Threadneedle Street and the Monetary Policy Committee. Markets are pricing in a no-change announcement from Andrew Bailey and the rest of the MPC. By keeping interest rates unchanged at 5.25%, would be a signal that the Committee is keen to see how the flurry of interest rate rises (14 hikes in a row) are taking their toll on the economy. 
Tomorrow marks one year since the MPC predicted the country was on course for its longest-ever recession and agreed on the biggest ever interest-rate hike since 1989. Today, economic signals and data are somewhat mixed but it does seem as though the UK economy is headed for a recession. In September the MPC report stated that, “suggested that activity had remained subdued and that there were growing concerns about the economic outlook”.
Disappointed with silver? Good time to buy 
Silver is currently underperforming relative to gold, in the near-term.Both are cited as safe-havens, but in the short-term gold may shine more than silver in this respect. It may well be silver’s industrial aspect that is causing the price to drag somewhat as markets try and get a handle on what the Middle East and poor global economic numbers mean for the metal. 
Gold Down $100? This Really Shouldn’t Be A Surprise
 
This may be the case in the short-term, but this is a great opportunity to buy for the long-term. No one buys silver expecting it to keep their blood pressure stable, but they do so because it is both an industrial metal and a good inflation hedge. Silver is hugely in demand across a number of necessary technological sectors, as well as acting as a store of value. Given its price increase of around 30% since the summer, this isn’t something to give up on just yet. 
Central Banks Go All In On Gold 
Central bank gold purchases continue to defy naysayers. According to the World Gold Council, Q3 net central bank buying was 337t, and even though this is lower than the same period last year, “demand from central banks y-t-d is 14% ahead of the same period last year at a record 800t.’ China and Poland were the most notable buyers. China added 78t to its reserves bringing its total purchases this year to 181t. Poland added 57t bringing its purchases this year to 105t. Gold now represents 11% of the NBP’s reserve. This is just over half of the 20% NBP President Adam Glapiński said the bank was aiming for. 
China has been on an 11 month buying spree, theirs and others’ gold demand is flying the flag for physical gold demand, which declined across other sectors (jewellery, technology etc). This is despite gold prices remaining strong, across currencies. This suggests that these purchases are strategic and tactical. 
Since gold was first discovered it has held intrinsic value for mankind. But, that value is seemingly increasing as the risks in the geopolitical sphere continue to grow. Gold purchases at these levels are basically central Banks metaphorically jumping up and down with the signal of global distress and saying ‘we need to own gold, we do not trust that the global system will be stable in the near-future’. 
When will everyone else catch on?

The big news in gold is two-fold right now; gold hit new all-time highs in several currencies and central bank demand for physical gold remains strong hitting a year-to date record in Q3 this year. 
Gold at $2,000? 
So whilst the headlines were all about dollar-denominated gold showing us that it’s still destined for levels north of $2,000 the real news is about other currencies and gold. Ahead of yesterday’s FOMC announcement the price of the yellow metal hit new all time highs in pretty much most of the major non-dollar currencies. This includes the Euro, British Pound, Chinese Yuan and Japanese Yen. 
To give more weight to the argument that the dollar is becoming increasingly less significant to the price of gold, the metal barely blinked following the FOMC’s announcement yesterday that it would continue to hold rates. 
At the press conference following the FOMC meeting Chairman Powell did confirm the Committee’s bias towards tightening, prompting gold to fall back slightly (to a five-day) low but it quickly recovered to levels seen prior to the announcement. 
We continue to see a breakdown in the negative correlation between gold and bond yields. This is most likely because investors are growing increasingly concerned about the fiscal outlook of the U.S. government and its mounting debt, which has topped $33 trillion.
We believe factors beyond the control of the US and Federal Reserve are now placing more weight on gold demand and the price of gold, than previously. Most obvious is events in Gaza but there is also the small issue of central banks everywhere still trying to keep their economies afloat, and another looming energy crisis. 
Bank of England – will they? Won’t they? They won’t.
Speaking of economic struggles and central bank decisions, all eyes are poised on Threadneedle Street and the Monetary Policy Committee. Markets are pricing in a no-change announcement from Andrew Bailey and the rest of the MPC. By keeping interest rates unchanged at 5.25%, would be a signal that the Committee is keen to see how the flurry of interest rate rises (14 hikes in a row) are taking their toll on the economy. 
Tomorrow marks one year since the MPC predicted the country was on course for its longest-ever recession and agreed on the biggest ever interest-rate hike since 1989. Today, economic signals and data are somewhat mixed but it does seem as though the UK economy is headed for a recession. In September the MPC report stated that, “suggested that activity had remained subdued and that there were growing concerns about the economic outlook”.
Disappointed with silver? Good time to buy 
Silver is currently underperforming relative to gold, in the near-term.Both are cited as safe-havens, but in the short-term gold may shine more than silver in this respect. It may well be silver’s industrial aspect that is causing the price to drag somewhat as markets try and get a handle on what the Middle East and poor global economic numbers mean for the metal. 
Gold Down $100? This Really Shouldn’t Be A Surprise
 
This may be the case in the short-term, but this is a great opportunity to buy for the long-term. No one buys silver expecting it to keep their blood pressure stable, but they do so because it is both an industrial metal and a good inflation hedge. Silver is hugely in demand across a number of necessary technological sectors, as well as acting as a store of value. Given its price increase of around 30% since the summer, this isn’t something to give up on just yet. 
Central Banks Go All In On Gold 
Central bank gold purchases continue to defy naysayers. According to the World Gold Council, Q3 net central bank buying was 337t, and even though this is lower than the same period last year, “demand from central banks y-t-d is 14% ahead of the same period last year at a record 800t.’ China and Poland were the most notable buyers. China added 78t to its reserves bringing its total purchases this year to 181t. Poland added 57t bringing its purchases this year to 105t. Gold now represents 11% of the NBP’s reserve. This is just over half of the 20% NBP President Adam Glapiński said the bank was aiming for. 
China has been on an 11 month buying spree, theirs and others’ gold demand is flying the flag for physical gold demand, which declined across other sectors (jewellery, technology etc). This is despite gold prices remaining strong, across currencies. This suggests that these purchases are strategic and tactical. 
Since gold was first discovered it has held intrinsic value for mankind. But, that value is seemingly increasing as the risks in the geopolitical sphere continue to grow. Gold purchases at these levels are basically central Banks metaphorically jumping up and down with the signal of global distress and saying ‘we need to own gold, we do not trust that the global system will be stable in the near-future’. 
When will everyone else catch on?

Last night, gold futures came within touching distance of $2,000, touching $1,998.60 and closed at $1,994.40. This move towards the key psychological level was especially impressive given US dollar strength during the day. Short-term strength of both assets is likely to be on the back of safe haven demand in the Middle East. 
Gold’s tear may have let up somewhat on account of US housing data performing better than expected as well as some diplomatic efforts in the Middle East starting to show some progress. 
Look out today and tomorrow for two key reports out of the US, which may also put pressure on gold. Third quarter GDP data will be released today at 8:30 AM EDT. And tomorrow look out for the most recent inflation statistics from the BEA (Bureau of Economic Analysis) as well as the September PCE (Personal Consumption Expenditure Price Index). Both of these will likely impact which way the FOMC will go next week. 
Currently, the common view of the FOMC is that they will hold rates where they are, however today and tomorrow’s releases could determine whether another hike is coming this year. 
China in a panic?
Is it because of efforts to support its currency or geopolitical tensions? Or both? Who knows but US Treasury data shows that China has been selling off pretty chunky amounts of US assets. And where are they putting the proceeds? Well, who knows really but it’s interesting that both the PBOC’s and private investors’ gold demand has picked up pace across the same period that China has been selling off US Treasuries. 
  This isn’t the only action China has taken to shore up its economy of late. On Tuesday the government announced plans to issue additional sovereign debt worth 1 trillion yuan. This will send the deficit to a three-year high. The decision to flood the market is more notable in what it says about the PBOC’s and governments concerns about the health of the economy, than the move itself. 
Expect to see more aggressive moves from China as it works hard to steady the economy’s collapse towards a soft landing. 
Watch this space
Right now if you come across a mainstream article about the gold price and its recent performance then it will likely point to the ongoing atrocities in the Middle East as the main driver behind gold’s strength. Whilst we don’t disagree that the geopolitical risk premium is playing its part, it is quite short sighted and we don’t expect this to be a long-lived scenario. 
It’s too easy for the mainstream to forget that gold had been strong prior to the attacks by Hamas on Israel, and the ensuing retaliation. This is, as we have said frequently, because positive sentiment towards monetary decisions and the strength of the global economy is very weak at present. Very few people believe that the likes of the FOMC and governments have got any kind of recovery in their midst. Any decision by government or monetary policy committees is about making the best of a bad situation, and coping, not about paying down debt and bringing value back to currencies. 
Gold Down $100? This Really Shouldn’t Be A Surprise
 
Of course, events in the Middle East and the actions of the US Federal Reserve are not completely disconnected. How the war will develop and to what extent it envelops the rest of the region and its allies will be very much a factor when the FOMC is considering whether or not to hike rates. But we’re not convinced that gold is so reliant on interest rate data. 
If you google something along the lines of “gold and interest rate relationship” then you will almost certainly see a search response along the lines of: “the relationship between gold and interest rates is traditionally an inverse one” or “gold and interest rates are negatively correlated.”
But, right now. This simply isn’t the case. Interest rates are surging and gold is giving them the proverbial middle finger. 
More on this next week. 

Last night, gold futures came within touching distance of $2,000, touching $1,998.60 and closed at $1,994.40. This move towards the key psychological level was especially impressive given US dollar strength during the day. Short-term strength of both assets is likely to be on the back of safe haven demand in the Middle East. 
Gold’s tear may have let up somewhat on account of US housing data performing better than expected as well as some diplomatic efforts in the Middle East starting to show some progress. 
Look out today and tomorrow for two key reports out of the US, which may also put pressure on gold. Third quarter GDP data will be released today at 8:30 AM EDT. And tomorrow look out for the most recent inflation statistics from the BEA (Bureau of Economic Analysis) as well as the September PCE (Personal Consumption Expenditure Price Index). Both of these will likely impact which way the FOMC will go next week. 
Currently, the common view of the FOMC is that they will hold rates where they are, however today and tomorrow’s releases could determine whether another hike is coming this year. 
China in a panic?
Is it because of efforts to support its currency or geopolitical tensions? Or both? Who knows but US Treasury data shows that China has been selling off pretty chunky amounts of US assets. And where are they putting the proceeds? Well, who knows really but it’s interesting that both the PBOC’s and private investors’ gold demand has picked up pace across the same period that China has been selling off US Treasuries. 
  This isn’t the only action China has taken to shore up its economy of late. On Tuesday the government announced plans to issue additional sovereign debt worth 1 trillion yuan. This will send the deficit to a three-year high. The decision to flood the market is more notable in what it says about the PBOC’s and governments concerns about the health of the economy, than the move itself. 
Expect to see more aggressive moves from China as it works hard to steady the economy’s collapse towards a soft landing. 
Watch this space
Right now if you come across a mainstream article about the gold price and its recent performance then it will likely point to the ongoing atrocities in the Middle East as the main driver behind gold’s strength. Whilst we don’t disagree that the geopolitical risk premium is playing its part, it is quite short sighted and we don’t expect this to be a long-lived scenario. 
It’s too easy for the mainstream to forget that gold had been strong prior to the attacks by Hamas on Israel, and the ensuing retaliation. This is, as we have said frequently, because positive sentiment towards monetary decisions and the strength of the global economy is very weak at present. Very few people believe that the likes of the FOMC and governments have got any kind of recovery in their midst. Any decision by government or monetary policy committees is about making the best of a bad situation, and coping, not about paying down debt and bringing value back to currencies. 
Gold Down $100? This Really Shouldn’t Be A Surprise
 
Of course, events in the Middle East and the actions of the US Federal Reserve are not completely disconnected. How the war will develop and to what extent it envelops the rest of the region and its allies will be very much a factor when the FOMC is considering whether or not to hike rates. But we’re not convinced that gold is so reliant on interest rate data. 
If you google something along the lines of “gold and interest rate relationship” then you will almost certainly see a search response along the lines of: “the relationship between gold and interest rates is traditionally an inverse one” or “gold and interest rates are negatively correlated.”
But, right now. This simply isn’t the case. Interest rates are surging and gold is giving them the proverbial middle finger. 
More on this next week. 

LBMA
This week I attended the LBMA’s Global Precious Metals conference in Barcelona. As usual it was a flurry of activity and discussion between cross sections of those involved in precious metals. At the end of the conference attendees are asked to give their forecasts for the precious metals markets, for the next 12 months. 
Early reports indicate that attendees expect gold to outperform amongst the precious metals, reaching $1,990.30 an ounce by October 2024. 
The outlook for silver was also pretty bullish. At the time of writing silver is sitting around $23. LBMA conference participants expect to see this climb to $26.80 by this time next year. 
We suspect much of this bullishness is on account of events in the Middle East. Gold has climbed by over 5% since the violence began. Prior to that it had been at its lowest since March. 
  Next year will be an interesting one in terms of gold drivers, and some market participants may have to pivot themselves somewhat in terms of what to pay attention to. This year (and years prior) all eyes have been on the FOMC decisions, US dollar strength and of course Treasury yields. Next year we expect the gold market to pay less attention to these factors. After all, the FOMC isn’t expected to move much and already gold is barely blinking when US data releases are positive (see today’s labour numbers).
Instead, more weight will be placed on safe haven demand and physical demand. This isn’t just in relation to war but also in economies where citizens have a natural affiliation to gold investment and perhaps aren’t performing as well elsewhere. We’re of course thinking about China, in particular. The Shanghai Premium is something we have discussed recently, this is a good indication of a divergence happening in the gold market. 
Buy Silver, For The Sake Of The Planet
Silver is, of course, also a safe haven and we expect it will do well on the back of this, just like gold. But we are especially excited about it because of its industrial properties. The global transition to green energy is providing solid support for silver prices. 
For a long time, there have been concerns about supply-shortages. Unlike the PGM metals, there is no option for substitution. So, there could be a real stock issue if more silver supply is not found. It is estimated that another 2 or 3 mines will need to open in order to satisfy projected solar demand. Failing this, above ground stocks will need to be used. In both cases the current price does not make either option especially attractive, so watch this space to see climbs in the silver price. 
JP Morgan Would Be Proud
LBMA participants are not the only ones getting ready to stock up on gold. JP Morgan’s Chief Market Strategist Marko Kolanovic is also set to. In the bank’s Global Markets Strategy report, Kolanovic explained that the continued escalation of geopolitical dangers and the overvaluation of equity markets in the United States and elsewhere made this an opportune moment for investors to boost their gold exposure.
Gold Down $100? This Really Shouldn’t Be A Surprise
 
The investment bank will be maintaining a“ defensive allocation in our model portfolio…We additionally increase our allocation within commodities to gold, both as a geopolitical hedge, and given an expected retracement in real bond yields.”
This would no doubt delight the organisation’s founder who purportedly said before Congress in 1912, “Gold is money. Everything else is credit.” 
If you’re interested to know how bullish Kalanovic is on gold, JP Morgan is projecting spot gold prices to reach $2,175 by Q4 2024. 
More to come?
It’s not even Thanksgiving yet so expect more forecasts in the coming weeks. Of course, in some ways they should be taken as a pinch of salt as no one can predict the future. No one expected the Middle East violence to pick up like it did, when it did, for example. But forecasts are a great way to pick up on the sentiment surrounding gold – why do industry professionals think people buy gold, why do they buy gold. It can give you a good feeling for how these same people will react when the unexpected happens. And, as we know, something unexpected always happens and that’s when gold shines. 
 

It's that time of the month again when we bring in a top chart analyst to take us through what they're seeing in the markets, right now. This month we have the brilliant Gareth Soloway.
Gareth explains why he's watching the US dollar and why that means that "Good news is bad news" and when we can expect to see when "Bad news is good news".
Gareth expects we will see gold breaking through all-time highs in the next 12 months, and praises gold for remaining so close to it's all-time high.
As for silver? Is there a longer, sustained rally for the industrial precious metal? Will it head over $30?
And, if you are fan of gold miners you won't want to miss why Gareth's excited about them.
Click below to watch

 

Over the August period, it’s easy for people to switch off and to some extent, it might feel like the precious metals have been doing the very same!
However, if you look at the YTD performance of gold across key currencies in the World Gold Council table provided below then you will take some heart that things aren’t so bad (especially if you bought in Turkish Lira!).
But it does seem as though gold and silver have been under some pressure of late. This is largely thanks to the strengthening US dollar and US Treasury yields (they reached a 14-year high right before Labor Day weekend). Oil prices have also been rising.
Interest rates and currencies have been relatively stable. All whilst the rest of the market seemed to take a bit of a tumble earlier this week. Why is this? Because things are looking up across a number of sectors and so there is a (new) expectation that the FOMC will keep interest rates at these relatively higher levels for longer. Therefore, it’s more attractive to hold US dollars than other liquid assets such as gold and silver, right now.
Why Is the US Dollar So Strong?
The strength of the US dollar is largely thanks to the fact that it is currently the biggest, bestest bully in a bad bunch. So strong is the US dollar against other currencies (namely Asian currencies) that both the Chinese and Japanese central banks have issued statements to warn that they will defend themselves should they feel the need to.
This strong US dollar will exacerbate inflation across the world, of this we have little doubt. The majority of commodities (including oil) are priced in dollars. This makes imports expensive and so causes inflation to rise in countries that are already struggling with housing crises, cost of living crises and currency weakness.
Weak growth across China (and calls for intervention from the central bank) is only boosting demand for the dollar more, as international savers and investors flock to it.
  Meanwhile market expectations suggest that both the UK and Eurozone may lower interest rates, sooner than the US given their own sluggish performances of late. This will only serve to boost dollar demand as it maintains its top-dog status when it comes to interest rates.
There is little doubt that the US Treasury yield curve is the most important economic indicator right now. Since July 2022 it has been inverted and in the last month or so it has been steepening as long-dated rates have risen faster than short rates.
A situation like this is tricky for assets such as gold. Investors tend to look at a yield curve such as this and expect that we are heading into a period of reflation and (therefore) further interest rate hikes. So, it is likely to be a tough period for gold. Especially, if we see periods when long and short term rates rise together.
Why Do You Buy Gold?
However…we always come back to this – why are you buying gold? Because it outperforms the dollar? No.  Because it makes you a quick buck or two? No. You buy gold because it’s insurance for your portfolio.
As perverse as it sounds – all the reasons why the US dollar is doing so well are the exact reasons why you should buy gold and hold onto it.
Just because something is doing well, doesn’t mean that it is well. The US dollar is doing well relative to other currencies. The US country is doing well relative to other countries, largely because of dollar hegemony. This does not mean that the dollar is a safe asset.
 Currency markets are fickle. Think back to a few months ago when they were betting against the dollar. Expectations were that rate rises in the EU and UK would put pressure on the dollar, short positions were increasing. And, don’t forget the BRICS warming themselves up to use the dollar less and less.
Patrick Karim on gold, inflation and the next break out
 
It is still suffering and will suffer more, from the effects of very poor monetary policy. The currency and the economy have been inflated to never-imagined levels and the country is in a level of debt we struggle to write down numerically, in full.
You do not buy gold because it is a competitor to a fiat currency, you buy gold because it secures your wealth when your portfolio is suffering the effects of decades long monetary abuse.  A slow month or two for gold is not a sign that things are doing well, we would perhaps see this latest US dollar strength as the fat lady enjoying her moment, singing her head off.

Over the August period, it’s easy for people to switch off and to some extent, it might feel like the precious metals have been doing the very same!
However, if you look at the YTD performance of gold across key currencies in the World Gold Council table provided below then you will take some heart that things aren’t so bad (especially if you bought in Turkish Lira!).
But it does seem as though gold and silver have been under some pressure of late. This is largely thanks to the strengthening US dollar and US Treasury yields (they reached a 14-year high right before Labor Day weekend). Oil prices have also been rising.
Interest rates and currencies have been relatively stable. All whilst the rest of the market seemed to take a bit of a tumble earlier this week. Why is this? Because things are looking up across a number of sectors and so there is a (new) expectation that the FOMC will keep interest rates at these relatively higher levels for longer. Therefore, it’s more attractive to hold US dollars than other liquid assets such as gold and silver, right now.
Why Is the US Dollar So Strong?
The strength of the US dollar is largely thanks to the fact that it is currently the biggest, bestest bully in a bad bunch. So strong is the US dollar against other currencies (namely Asian currencies) that both the Chinese and Japanese central banks have issued statements to warn that they will defend themselves should they feel the need to.
This strong US dollar will exacerbate inflation across the world, of this we have little doubt. The majority of commodities (including oil) are priced in dollars. This makes imports expensive and so causes inflation to rise in countries that are already struggling with housing crises, cost of living crises and currency weakness.
Weak growth across China (and calls for intervention from the central bank) is only boosting demand for the dollar more, as international savers and investors flock to it.
  Meanwhile market expectations suggest that both the UK and Eurozone may lower interest rates, sooner than the US given their own sluggish performances of late. This will only serve to boost dollar demand as it maintains its top-dog status when it comes to interest rates.
There is little doubt that the US Treasury yield curve is the most important economic indicator right now. Since July 2022 it has been inverted and in the last month or so it has been steepening as long-dated rates have risen faster than short rates.
A situation like this is tricky for assets such as gold. Investors tend to look at a yield curve such as this and expect that we are heading into a period of reflation and (therefore) further interest rate hikes. So, it is likely to be a tough period for gold. Especially, if we see periods when long and short term rates rise together.
Why Do You Buy Gold?
However…we always come back to this – why are you buying gold? Because it outperforms the dollar? No.  Because it makes you a quick buck or two? No. You buy gold because it’s insurance for your portfolio.
As perverse as it sounds – all the reasons why the US dollar is doing so well are the exact reasons why you should buy gold and hold onto it.
Just because something is doing well, doesn’t mean that it is well. The US dollar is doing well relative to other currencies. The US country is doing well relative to other countries, largely because of dollar hegemony. This does not mean that the dollar is a safe asset.
 Currency markets are fickle. Think back to a few months ago when they were betting against the dollar. Expectations were that rate rises in the EU and UK would put pressure on the dollar, short positions were increasing. And, don’t forget the BRICS warming themselves up to use the dollar less and less.
Patrick Karim on gold, inflation and the next break out
 
It is still suffering and will suffer more, from the effects of very poor monetary policy. The currency and the economy have been inflated to never-imagined levels and the country is in a level of debt we struggle to write down numerically, in full.
You do not buy gold because it is a competitor to a fiat currency, you buy gold because it secures your wealth when your portfolio is suffering the effects of decades long monetary abuse.  A slow month or two for gold is not a sign that things are doing well, we would perhaps see this latest US dollar strength as the fat lady enjoying her moment, singing her head off.

Buckle up, because India isn’t just racing on the path of economic transformation; it’s blazing a trail. We’re talking about a nation that has evolved from contributing just 6.3% of global GDP growth in 2007 to a projected 17.4% by 2028. The underdog is gaining ground on China, and gold investors might be the unexpected beneficiaries.
The Shift in the Economic Landscape
In Q1 2023, India’s GDP growth stood at an impressive 6.1%, leaving China’s 4.5% in the rearview mirror. If you think this is mere fluke, you’re missing the larger tapestry of a world reshaped by dynamic trade, open markets, and crucially, domestic reforms.
People Power
Consider this: India is now the world’s most populous country, overtaking China in April this year with a population of 1.4 billion. By 2027, India is expected to add 75 million more citizens, while China will lose 8 million. China’s ageing, plateauing middle class lacks the fuel for significant economic expansion. In contrast, India’s youthful, underemployed population is a powder keg waiting to explode—in a good way.
The Pitfalls of Central Control
China’s love affair with central planning doesn’t just come with a bouquet of red roses; it has its thorns. High-profile tech billionaires go missing only to resurface “humbled.” This iron grip stifles creativity and injects tension into international relations. On the flip side, India—boasting a global diaspora helming companies like Alphabet, Microsoft, and Adobe—capitalises on its reputation for entrepreneurial freedom. Apple’s choice to manufacture the iPhone 14 in India instead of China is a glaring example.
  The Achilles Heel
But let’s not get carried away. India has hurdles to clear. Despite its enormous promise, the nation has a history of failing to capitalise on its economic potential. Although Indian PM Modi has ushered in crucial infrastructure and modernization programs, the ghosts of bureaucratic and social challenges still haunt India’s progress.
The Numbers Game
To put things into perspective, China’s GDP sits at a hefty $17.7 trillion compared to India’s $3.2 trillion. China outpaces India in STEM graduates, R&D investment, and literacy rates. But remember, China was once an underdog too. In the ’80s, its economy was smaller than India’s. If China can leapfrog its way to economic primacy, why can’t India?
Gold: The X-Factor
And here’s where gold comes in. In India, gold isn’t just a metal; it’s part of the national psyche. Indians are increasingly moving from rural to urban settings, changing the form in which they invest in gold—from jewellery to bars and coins. As India’s economy expands, so will its appetite for gold, making it a market impossible to ignore for global investors.
The Long Road Ahead
India might be where China was in the early 2000s. The recipe for success includes enhancing educational systems, modernising infrastructure, and steering focus towards cutting-edge sectors like AI. The nation needs to decide if it’s content with mere participation or becoming a serious player. .
As India fine-tunes its focus, the world watches. Recently India has focussed on getting a spaceship on the moon, which is an incredible achievement, but at the same time investment in AI is falling far behind the level one would expect of an emerging superpower.
This may be telling as to where their priorities lie; playing to stay in the game or playing to a domestic audience. There can be no doubt that their future is in their hands and if fully embraced all the world will benefit from their success, even the Chinese.

Buckle up, because India isn’t just racing on the path of economic transformation; it’s blazing a trail. We’re talking about a nation that has evolved from contributing just 6.3% of global GDP growth in 2007 to a projected 17.4% by 2028. The underdog is gaining ground on China, and gold investors might be the unexpected beneficiaries.
The Shift in the Economic Landscape
In Q1 2023, India’s GDP growth stood at an impressive 6.1%, leaving China’s 4.5% in the rearview mirror. If you think this is mere fluke, you’re missing the larger tapestry of a world reshaped by dynamic trade, open markets, and crucially, domestic reforms.
People Power
Consider this: India is now the world’s most populous country, overtaking China in April this year with a population of 1.4 billion. By 2027, India is expected to add 75 million more citizens, while China will lose 8 million. China’s ageing, plateauing middle class lacks the fuel for significant economic expansion. In contrast, India’s youthful, underemployed population is a powder keg waiting to explode—in a good way.
The Pitfalls of Central Control
China’s love affair with central planning doesn’t just come with a bouquet of red roses; it has its thorns. High-profile tech billionaires go missing only to resurface “humbled.” This iron grip stifles creativity and injects tension into international relations. On the flip side, India—boasting a global diaspora helming companies like Alphabet, Microsoft, and Adobe—capitalises on its reputation for entrepreneurial freedom. Apple’s choice to manufacture the iPhone 14 in India instead of China is a glaring example.
  The Achilles Heel
But let’s not get carried away. India has hurdles to clear. Despite its enormous promise, the nation has a history of failing to capitalise on its economic potential. Although Indian PM Modi has ushered in crucial infrastructure and modernization programs, the ghosts of bureaucratic and social challenges still haunt India’s progress.
The Numbers Game
To put things into perspective, China’s GDP sits at a hefty $17.7 trillion compared to India’s $3.2 trillion. China outpaces India in STEM graduates, R&D investment, and literacy rates. But remember, China was once an underdog too. In the ’80s, its economy was smaller than India’s. If China can leapfrog its way to economic primacy, why can’t India?
Gold: The X-Factor
And here’s where gold comes in. In India, gold isn’t just a metal; it’s part of the national psyche. Indians are increasingly moving from rural to urban settings, changing the form in which they invest in gold—from jewellery to bars and coins. As India’s economy expands, so will its appetite for gold, making it a market impossible to ignore for global investors.
The Long Road Ahead
India might be where China was in the early 2000s. The recipe for success includes enhancing educational systems, modernising infrastructure, and steering focus towards cutting-edge sectors like AI. The nation needs to decide if it’s content with mere participation or becoming a serious player. .
As India fine-tunes its focus, the world watches. Recently India has focussed on getting a spaceship on the moon, which is an incredible achievement, but at the same time investment in AI is falling far behind the level one would expect of an emerging superpower.
This may be telling as to where their priorities lie; playing to stay in the game or playing to a domestic audience. There can be no doubt that their future is in their hands and if fully embraced all the world will benefit from their success, even the Chinese.