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Updated 14:50 13/05/21

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August Gold News 2016

Germans are withdrawing their life savings and parking their money in safes at home. Germans are savers by nature and despite interest rates being slashed to zero have continued to save. Historically, Germans deemed savings accounts as safe and secure. Recently, however, many have lost faith.

Following the ECB’s decision to take interest rates below zero, savers now face the real prospect of being charged to deposit money with their bank. In fact, a small German bank in Bavaria has already started to charge customers 0.4% on all balances over 100,000 euros. In a country where few buy stocks and ...

30 Aug 2016, 12:21 p.m.
Duncan Richardson

John Cryan, Deutsche Bank’s chief executive has warned negative interest rates are an accident waiting to happen. Cryan believes punishing savers will eventually will undermine the already fragile recovery.

The warning comes following the European Central Bank (ECB) decision to reduce the banks deposit rate to -0.4% and increase the size of their bond buying programme.

In an article in Handelsblatt, the bank chief said the current policies being adopted by the ECB are coughing off the recovery and weakening bank balance sheets.

Low interest rates have brought the insurance industry to its knees and Cryan believes negative rates will ...

25 Aug 2016, 10:23 a.m.
Adam Pike

In the first eight months of 2016 the gold price denominated in sterling has soared from £700 per ounce to well over £1,000. Political and economic uncertainty post Brexit and the loose monetary policies adopted by the world’s major central banks have support the price.

Brexit grabbed all the headlines and undoubtedly boosted the price. However, the extreme volatility in the Chinese equity markets and continued desire by Central Banks to push rates lower have also supported the price.

However, in recent weeks the gold price has paused for breath and is trading in a narrow range just ...

24 Aug 2016, 10:33 a.m.
Duncan Richardson

British billionaire and hedge fund manager, Crispin Odey, has gone all in on the yellow metal. In a letter to his clients, Odey explained the benefits of holding gold and confirmed that 86% of the firm’s assets under managements are now invested in gold futures. Odey has also purchased $75.7 million in Canadian gold miner Kinross Gold Corporation.

According to Odey we have reached the limits of quantitative easing and the fund manager believes negative rates are a form of financial repression. The billionaire is expecting gold to be repriced and believes the paper market has caused massive ...

23 Aug 2016, 10:26 a.m.
Adam Pike
The gold price has fallen to $1,333.09 per ounce following a rally in the U.S. dollar. The Greenback strengthen against its major trading partners after San Francisco Fed chairman, John Williams, said an interest rate rise in September is still a real possibility.

In the week ahead, traders will now shift their attention to Janet Yellen’s highly anticipated speech on Friday at the annual meeting of economists and central bankers. The meeting is the biggest monetary-policy meeting of the year and Yellen may use the opportunity to outline the Feds intentions for the upcoming year.

As the gold price ...

22 Aug 2016, 9:25 a.m.
Duncan Richardson

The last time the Dow Jones Industrial, NASDAQ, and S&P simultaneously closed at record highs, each market fell spectacularly for two and a half years. During the 2008 meltdown the S&P fell -40.33% the NASDAQ -75.01% and the Dow Jones -25.04%.

A number of high profile traders and economists are predicting that we are now on the cusp of another stock market panic. Billionaire investor Carl Icahn recently declared that retail clients are walking into the same trap as they did in 2007, and well known economist Andrew Smithers believes U.S. stocks are overvalued by as much as 80%. ...

19 Aug 2016, 10:25 a.m.
Adam Pike

Stockpiling billions of pounds’ worth of bank notes may sound like a plot form an old movie, but some financial institutions and insurers are contemplating the idea as central banks start charging them to deposit cash

Europe’s motorways are not yet jammed with armoured vans transporting bank notes to secure locations, but should it be more economical to do so the practice could become common place.

Following the ECB’s rate cut in March, banks are now paying an annual levy of 0.4% on funds held at anyone of the Eurozone’s 19 central banks.  The policy has cost banks an estimated ...

18 Aug 2016, 9:44 a.m.
Duncan Richardson

Jacob Rothschild’s Investment Trust, RIT Capital Partners, has dumped its sterling backed investments and increased their holdings in absolute return funds and physical gold.

The trust has been reviewing its asset allocation in the wake of Brexit and increased geopolitical tension. Rothschild sold £2.5 billion of sterling related assets reducing the trust's exposure in the British pound from 43% to 34%.

The trust increased its U.S dollar exposure to 57% and the funds gold exposure now stands at 8%. The trust has returned a 58% return in the last three years and the legendary Rothschild family has a 21% stack ...

16 Aug 2016, 10:10 a.m.
Duncan Richardson

Less than a week after the Bank of England cut interest rates and announced further quantitative easing, BoE policymaker Ian McCafferty has admitted that more for of the same should be expected should the UK’s economic situation decline.

Prior to the latest cuts, rates had remained unchanged since 2009 and the BoE’s latest actions is a worrying sign for savers. Negative interest rates are becoming increasingly common across the globe and it should not come as a surprise should they eventually arrive in the UK.

The Monetary Policy Committee have said to expect rates to be cut again before the ...

9 Aug 2016, 11:22 a.m.
Samuel Gee

Barclays bank have confirmed that 2016 has already seen record-breaking amounts flowing into precious metals-based exchange-traded products.

In a year characterised by insecurity, the popularity – and value - of gold and other precious metals have risen significantly. Investors typically favour gold in times of uncertainty, preferring the security offered by an asset with a high intrinsic value. This has certainly been the case in 2016, with total precious metals-based ETPs up $50 billion since the start of the year.

The rising inflows into precious metals ETPs is arguably most significant because it demonstrates a changing attitude amongst investors who ...

8 Aug 2016, 9:26 a.m.
Samuel Gee

As the Bank of England prepares to cut what little remains of the UK base interest rate, Britons are hoarding cash at the highest rate since 2009. In a damning indictment of the banking system, an increasingly large amount of savers now view the underside of their mattress as a safer place for their money than the bank.

Since the end of May, the amount of cash outside the banking system has increased by £1.2bn and £5.9bn in the last year. Uncertainty about the future security of fiat currencies has created a nervous atmosphere with the UK seemingly sleepwalking into ...

4 Aug 2016, 9:49 a.m.
Samuel Gee