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February Gold News 2016

Former governor of the Bank of England Mervyn King has warned a global financial crash is imminent because governments, regulators and financial markets have failed to reform the banking system.

King was at the helm of the Bank of England between 2003 and 2013 and was the architect behind the £500 billion bailout of the UK banking system in 2008.

Rather than blaming his banking buddies King believes the route of the problem lies in our system of money and the structure of our banking system. Surely as the Governor of the Bank of England it was his job to ...

29 Feb 2016, 1:57 p.m.
Duncan Richardson

In an act of desperation the Venezuelan government has shipped $1.3 billion of gold bars to Switzerland, according to data released from the Swiss Federal Customs Administration.

The Venezuelan economy is crashing and the government needs to raise $2.3 billion before the end of the month to stop the country officially defaulting on its debt.

Although the gold has been shipped to Switzerland it does not necessarily mean the gold has been sold. The Venezuelan government may simply be using the gold for collateral on a potential loan. This would appear to be the most likely reason behind the shipment.

26 Feb 2016, 9:53 a.m.
Adam Pike

The International Monetary Fund (IMF) is the latest organisation to confirm the global economy is weakening and is highly susceptible to adverse shocks.

The IMF warning comes only weeks after Royal Bank of Scotland and UBS told investors to dump equities and prepare for a global recession. In its latest report the IMF blames the slowdown in China and low oil prices for reasons to the recent slowdown.

The comments come a week before the G20 finance ministers and central bankers meet in Shanghai. The fund will argue that central bankers and governments need to act to stop the global ...

25 Feb 2016, 10:53 a.m.
Duncan Richardson

Don’t be fooled, the new trend by central banks to eliminate high value bank notes has done nothing to do with protecting you from terrorism or fighting the war on drugs, and has everything to do with protecting the banks. If only a fraction of the population withdrew their money out of their accounts the banking system would fail.

Last week the European Central Bank announced their intention to remove the 500 euro note from circulation and on the 16th Feb a former U.S Treasury official called for the $100 bill to be scrapped.

No doubt western powers will call ...

23 Feb 2016, 4:27 p.m.
Duncan Richardson

Following a four year bear market the gold price is once again in the ascendancy as central banks take drastic action and implement negative interest rates.

With the global economy faltering, there is no way the Fed will continue to raise rates in 2016. It is more likely the Fed will take rates negative in a last ditch attempt to kick start a slowing economy. Unsurprisingly, gold has been the year’s best performing asset. Negative rates mean customers are charged to deposit money with a bank. 

Charging customers to deposit money in theory should stimulate the economy by increasing spending ...

22 Feb 2016, 3:44 p.m.
Duncan Richardson

U.S. regulators must consider breaking up the country’s largest banks as they represent a “nuclear” threat to the global economy according Neel Kashkari.

Neel Kashkari was Hank Poulson’s right hand man during the 2008 crisis and has been widely credited as the architect behind the 2008 bank bailouts. Kashkari’s warning comes as bank shares fall as the threat of a global recession increases.

Kashkari now the Head of the Minneapolis Fed, is calling for regulators to force Wall Street’s banks to hold greater reserves. In Kashkair’s opinion the biggest banks are still too big to fail and continue to pose ...

17 Feb 2016, 4:09 p.m.
Adam Pike

With global equities experiencing their worst start to a year on record, the recent rally in world equities will have calmed the financial markets.  Safe haven assets such as gold and government debt have benefited as investors rushed to protect their capital.

Gold has been the best performing asset class in 2016, as traditional paper assets have faltered. On Thursday the gold price saw its biggest daily gain since the 2008 economic crash and has advanced by £112 per ounce since the turn of the year.

With volatility in the financial markets expected to remain amid growing concerns over multi ...

16 Feb 2016, 10:50 a.m.
Duncan Richardson

The world’s central banks are quickly back tracking on their plans to increase interest rates as equity markets plunge.

Traders now believe not one G7 central bank will have the confidence to raise rates in 2016. Instead of tightening monetary policy the odds are growing central banks will reserve policy and implement negative interest rates.

The change in expectation follows a dramatic fall in global equity markets. After thirty years of gradually falling interest rates perhaps this comes as no surprise. Since the collapse of Bear Stearns in 2008, central banks around the world have cut rates on 637 occasions. ...

15 Feb 2016, 3:48 p.m.
Duncan Richardson

Britain’s largest banks are vulnerable should we enter another financial crisis. According to, Sir John Vickers, who led the inquiry into the 2008 banking crisis, UK banks do not have the necessary buffers in place to survive a liquidity crisis.

Vickers, a former Bank of England economist, believes the City of London have diluted the recommendations put forward by the Independent Commission on Banking.

The warning comes as Chinese authorities attempt to stabilize their equity markets as fears of a 2008 banking crisis resurface.

Fears are also rising that low inflation and waning confidence in European Central Banks ability to ...

15 Feb 2016, 3:46 p.m.
Adam Pike

Equity markets across Europe are down sharply this morning following a savage sell off in Asia. The FTSE 100 is now trading at a three and a half year low, whilst the German DAX has fallen to a 16 month low.

The Hang Seng slumped 3.9% overnight as equity markets reopened following the Chinese New Year.

Banks shares are leading the downturn with Deutsche Bank falling -8%, Barclays -5.75%, -Lloyds 2.89% and the Royal Bank of Scotland -3.75%.

Markets are concerned over the health of the banking system following Janet Yellen’s comments that the global economy is faltering. The global ...

11 Feb 2016, 11:47 a.m.
Duncan Richardson

Banking shares have been decimated this week with Deutsche bank being hit hardest. Fears are growing the worlds too big to fail banks are being hit hard by the global slowdown. 2016 has been a turbulent year for financial markets and there are a number of potential flashpoints emerging.

China’s property bubble appears to be collapsing. Following the 2008 crash interest rates were slashed and credit soared as the Chinese built city after city. Private debt exploded and investors now fear China is facing their own subprime mortgage crisis.  

China is desperate to rebalance their economy, but this transition ...

10 Feb 2016, 3:29 p.m.
Duncan Richardson

Deutsche bank shares tumbled 8.5% yesterday as European markets spent the day in the red. The FTSE 100 dropped 2.7%, the Dow Jones Industry Index fell 1.1% and the Athens stock market finished at a 25 year low.

Bank shares led the downturn, with Barclay’s finishing 5.3% down, HSBC fell 4.2%, Lloyds dropped 3.9% and RBS finished down 4.6%.

After falling 10% Deutsche Bank attempted to calm the markets by issuing a statement defending its liquidity. Deutsche bank has a $50 trillion derivative exposure and many believe it’s only a matter of time before they are bailout by the German ...

9 Feb 2016, 11:07 a.m.
Duncan Richardson

Chinese foreign reserves have fallen for three consecutive months as the Peoples Bank of China attempts to defend the yuan and stop capital fleeing the country.

The countries reserves dropped by $99.5 bn in January to $3.23 trillion, the lowest level since May 2012. Despite still having a significant war chest investors are worried over the shear pace of depletion.

The Chinese government has to defend the yuan as a steep devaluation could potentially send shock waves through an already fragile economy. Many Chinese companies have borrowed in U.S dollars and lower yuan will only increase their debt load.

By ...

8 Feb 2016, 5 p.m.
Duncan Richardson

According to the The Wall Street Journal thirty six 747 cargo planes have landed in Venezuelan capital stuffed with bank notes.

The notes were ordered by Nicolas Maduro the countries President in the latter half of 2015 in an attempt to increase the amount of money in circulation.  The President did not stop there, the country’s central bank held a number of meeting to discuss the possibility of ordering 10 billion more notes.  If sanctioned this transaction alone would double the total amount of money in circulation. Injecting roar cash into an economy will only accelerate the country’s economic collapse. ...

5 Feb 2016, 3:39 p.m.
Duncan Richardson

The gold price continues to rally buoyed by the growing expectation the Federal Reserve will delay future interest rate rises.

New York Fed President William Dudley told reports the economic outlook for the U.S. had worsened and policy makers should take this into consideration before they raises rates further.

The euro jumped over 2% against the U.S dollar to its highest level since October 2015. The dollar also fell 2% against the Japanese yen despite the Bank of Japan ramping introducing negative interest rates last week. Volatility is once again returning to currency markets.

The gold price is up over ...

4 Feb 2016, 1:20 p.m.
Duncan Richardson

The gold price has steadied after briefly touching a three month high on Tuesday, as concerns grow that the global economy is slowing. Worse than expected Chinese manufacturing data weighed heavy on the market.

 In 2016 gold has been the best performing commodity and one of the very few to post a gain so far this year. Year to date gold has risen 6% while the Dow Jones has fallen by over 1,000 points.  Commodity prices have been decimated and the oil price continues to fall.

The gold price rallied to over $1,131.40 per ounce on Tuesday, its highest level ...

4 Feb 2016, 1:18 p.m.
Adam Pike

The Bank of Japan (BoJ) shocked the financial markets on Friday by cutting interest rates into negative territory in attempt to end a decade of low growth.

The BoJ announced they will now charge commercial banks for depositing money at the central bank.  The BoJ is already printing 80 trillion yen per year and appears on course to be the first central bank to destroy it currency. Unsurprisingly following the announcement the yen fell sharply against the U.S.

Haruhiko Kuroda the BoJ’s governor said he was ready to extend the size of the banks money printing program and cut rates ...

1 Feb 2016, 3:34 p.m.
Peter Walden