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Updated 08:38 13/04/21

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October Gold News 2015

The gold price has fallen to its lowest level in three weeks on expectation the Federal Reserve may raise interest rates during their December meeting. Considering rates have been held at near zero for 7 years any upward expectation may prove to be misguided.

The gold price had gained momentum over the last month as economic data suggested the world economy is slowing and the possibility of further easing had been tabled by the ECB and the BOJ.

Even more surprising the gold price fell on the same day U.S Commerce Department reported GDP in the U.S. had fallen to ...

30 Oct 2015, 11:30 a.m.
Duncan Richardson

Despite worse than expected economic data the Central Bank of Japan (BOJ) held fire on increasing the size of its already huge quantitative easing program.

The BOJ is gambling that the current annual stimulus program of £432 bn will be sufficient enough to halt the world’s third largest economy falling into recession.  It appears that QE in Japan is not working as the economy remains weak and inflation remains negative.

The governor of the Bank of Japan, Haruhiko Kuroda, has kept the door open vowing the BOJ will print more money if required. With both the ECB and BOJ threatening ...

30 Oct 2015, 11:28 a.m.
Peter Walden

The gold price fell 1% yesterday after the Federal Reserve decided against an interest rate rise. Short term interest rates in the U.S have been at 0% since December 2008. All we hear from the Fed is the economy is improving and a rate rise is just around the corner, however, the Fed has been saying this for 7 years.

The official line from the Fed is the U.S. economy is more isolated from wider global economic dangers than previously thought and as such a rate hike in December is a possibility.

Or is it the case the Fed can’t ...

29 Oct 2015, 12:31 p.m.
Adam Pike

Chinese gold demand is expected to reach an all-time high in 2015 as consumers return to the yellow metal following the crash of the Chinese stock market and devaluation of the yuan.

Demand began to surge in August as the stock market started its 30% correction. Physical demand for bars, coins and jewellery was further boosted in the third quarter following the government’s decision to devalue the yuan. Unsurprisingly, Chinese consumers turned to the yellow metal to protect their wealth.

In 2014 Chinese demand reached 973.6 tonnes and in the first 6 months of 2015 demand reached 497.3 tonnes. Following ...

28 Oct 2015, 11:54 a.m.
Duncan Richardson

With inflation below target and growth weaker than expected speculation is rising that the Bank of Japan may surprise the markets and ramp up the size of its quantitative easing program when the policy board meet on Friday.  

Analysts are predicting he BOJ may target an annual monetary base expansion from 80 trillion yen to 100 trillion yen. Despite aggressive monetary easing the BOJ has failed to drive inflation towards 2%.

On Thursday the President of the European Central Bank, Mario Draghi, suggested the ECB would be ready to increase the size of its quantitative easing program in December ...

27 Oct 2015, 2:54 p.m.
Duncan Richardson

The European Central Bank is ready to step up its monthly quantitative easing as soon as December. The euro fell immediately against the dollar on news the ECB may crank up the printing press in attempt to stop deflation taking hold across the 27 member states.

Recent inflation data suggests inflation in the Eurozone has turned negative in September. It was the threat of inflation which promoted the ECB to start its £44 billion a month quantitative easing program at the start of 2015. Quantitative easing is a process whereby central banks buy government debt, with money it has printed ...

23 Oct 2015, 4:10 p.m.
Duncan Richardson

With over $5 billion of debt maturing before the end of 2015, will Venezuela be forced into selling 80 tonnes of gold? Following years of financial mismanagement and the sudden drop in the oil price the Venezuelan economy is again on the brink of collapse.

With the majority of the countries reserves held in gold bullion the government may have to sell up 80 tonnes of gold to stop the country defaulting on its debt obligations. Venezuela owns 361 tonnes of gold and has the 16th largest hoard of central bank gold.

In April the countries leader, Nicolas Maduro, sold ...

22 Oct 2015, 12:10 p.m.
Adam Pike

Russia increased its gold holdings by another 34.2 tonnes in September, taking its total holdings to 1,353 tonnes. Septembers purchase was Russia’s seventh in a row and consolidates there position as the world’s sixth largest holder of the yellow metal. Gold now represents 13% of the countries total foreign exchange reserves and shows Russia is attempting to reduce their dependence of the U.S. dollar.

China also increased their official central bank holdings last month, although many believe Russia and China are failing to report the true value of their gold holdings.

Below is the top ten national holders of gold ...

21 Oct 2015, 4:03 p.m.
Duncan Richardson

China increased its official gold holdings by 14.9 tonnes or 480,000 ounces in September according to data released by the Peoples Bank of China. China’s total holdings now stand at 54.93 million ounces or 1,708.5 tonnes.

The Federal Reserve reports the U.S. holds over 8,000 tonnes of gold. Although this assumes the Fed has not sold any of its gold or secretly leased any out.

Gold only makes up 1.7% of China’s total reserves with the majority denominated in U.S. treasuries. Many now believe China is reducing its exposure to U.S. debt and diversifying into gold bullion and other hard ...

19 Oct 2015, 11:08 a.m.
Duncan Richardson

The gold price has broken through the key resistance level of $1170 per ounce and now looks likely to finish the year in positive territory for the first time in 3 years.

Yesterday in New York the gold price settled at $1,188 per ounce, importantly above $1,170 per ounce level where previous rallies had stumbled.

The price is now trading above its 200 day moving average which may prove to be another positive indicator. The gold price surged after data confirmed retail sales in the U.S. had softened. WalMart, the largest retailer in the U.S, surprised the markets by announcing ...

15 Oct 2015, 12:21 p.m.
Peter Walden

The gold price rose to a three and half month high on Tuesday as traders continue to discount a Fed rate hike in 2015. Strong physical buying in China has also supported the price. The gold price has risen £50 per ounce over the last month, whilst the silver price has advanced over 10.5%.

Poor economic data out of the U.S. and the Feds announcement last week that economic conditions are not right for a rate hike has further boosted the gold price. Unsurprisingly the U.S. dollar has traded lower.

In the near term the release of U.S retail and ...

14 Oct 2015, 10:30 a.m.
Duncan Richardson

Debt levels are unsustainable, the so called recovery has yet to materialise and cheap money is causing massive distortions in the global economy, according to IMF’s latest global stability report.

The funds report is a sobering read for central bankers and finance ministers as they assemble in Peru’s capital Lima for their yearly meeting.

Unprecedented amounts of money printing stopped the global economy falling into the abyss in 2008, but a solid recovery has failed to materialise. Cheap money has spilled out into the emerging markets causing asset prices to rise and encouraged governments and corporation’s to borrow unprecedented amount ...

9 Oct 2015, 11:18 a.m.
Adam Pike

Deutsche Banks has warned they are set to post a third quarter loss of £4.4 billion, its largest quarterly loss in 10 years. Germany’s largest financial institution blamed higher capital requirements in relation to their investment bank and a downgrade in the value of its Postal bank. The company’s dividend is expected to be cut.    

The bank is also putting aside £860 million to cover fines relating to their involvement in the libor scandal. The bank is also wrapped up in a potential precious metals manipulation investigation which is set to report its findings in 2016. Following the announcement ...

8 Oct 2015, 11:26 a.m.
Duncan Richardson

The IMF has issued its latest warning that the global economy is on the brink of another recession. The Washington based organisation is estimating that world growth will fall to a modest 3.1% this year, the lowest estimate since 2009.

Although the IMF have predicted global growth will reach 3.6% in 2016, the organisation warned there are considerable head winds facing the global economy. In particular the slowdown in the Chinese economy, volatility in global markets, a strengthening U.S. dollar, concerns over the health of the Greek economy and increased geopolitical tension in the middle east and Ukraine.

The fund ...

7 Oct 2015, 2:17 p.m.
Duncan Richardson

The gold and silver price surged on Friday after poor U.S. jobs data blew apart the assumption the Federal Reserve will raise rates in 2015.  The gold price surged £20 in 15 minutes and peaked at just over £750 an ounce, a 2.5% jump. The silver price also jumped to over £10 an ounce, increasing 5% since 1pm.

The U.S. labour participation rate fell to a 40 year low as a further 500,000 Americans decided to exit the jobs market. Analysts are now expecting the Fed to delay any interest rate rise until 2016. This is excellent news for gold which usually rises in a low ...

5 Oct 2015, 11:11 a.m.
Duncan Richardson

In one of the most ironic statements of the year ex fed chair Ben Bernanke said more financial executives should have faced criminal charges over the roles they played in the 2008 economic crisis.

According to Bernanke regulators and law enforcement agencies should have focused more on individuals and not just financial institutions. Considering Bernanke was at the helm of the Federal Reserve for over 2 years leading up to the crisis, surely he has a case to answer.

Unsurprising, Bernanke praised the Fed for their handling of the crisis and believes if the Fed had not intervened the world ...

5 Oct 2015, 11:10 a.m.
Adam Pike

The world’s mints are struggling to keep up with extraordinary retail demand for silver coins, sparked by falling prices. Silver is currently trading close to a five year low and is down over 60% from its 2011 peak. According to Reuter’s news agency the American, Austrian, Australian and Canadian mints are all rationing the sale of their popular 1oz silver coins.

The Royal Canadian Mint reported record sales for their 1oz. silver maple leaf coin for each of the last three months. Demand for the coin has been unprecedented in North America, Asia and throughout Europe.

The Austrian Mint has ...

1 Oct 2015, 10:22 a.m.
Duncan Richardson