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Updated 02:44 12/05/21

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May Gold News 2016

Japanese Prime Minister Abe presented a dossier to his G7 counterparts outlining the risks which could bring down the global economy.

Abe, believes that the recent decline in commodity prices is a sign we are on the precipice of anther Lehman moment. Abe told reporters, the G7 leaders had a comprehensive and full decision over the state of the global economy and the serious risks on the horizon.  

German Chancellor Merkel and French President Hollande appeared to support Abe’s view that we are facing the toughest year since 2008 economic meltdown. Despite all the talk leaders failed to agree ...

27 May 2016, 10:06 a.m.
Peter Walden

The gold price has dropped to a seven week low of £834 per ounce on expectation that the Federal Reserve will raise interests in June. The price is now down £48 per ounce following the release of Fed minutes last week.

Gold is a direct competitor to the U.S. dollar and a rate rise makes holding dollars more attractive than the yellow metal which yields no interest. Despite the recent pull back institutional money such as hedge funds are still bullish on the yellow metal.

Prior to last week’s announcement the U.S. dollar was under pressure and the technical outlook ...

25 May 2016, 11:02 a.m.
Duncan Richardson

Last week George Soros one of the richest men on earth, revealed he has gone long on gold. Soros has an impressive track record and famously made over a billion dollars in one day by betting against the British pound.

Soros revealed his investment fund invested $264 million in Toronto listed miner Barrick gold and a further $431 million in gold ETF’s. Soros is shorting the major stock indexes and has reduced his equity exposure.

Soros has built a personal fortune worth $24 billion and has repeatedly warned of the risks posed by a debt fuelled Chinese economy. The former ...

23 May 2016, 9:44 a.m.
Adam Pike

As the economy slows the Bank of England is preparing the groundwork for further cuts in interest rates. Gertjan Vlieghe, an external member of the Bank of England’s Monetary Policy Committee would vote for a cut even if the UK votes to remain the European Union.

Let’s not forget interest rates are at their lowest level in the 322 year history of the Bank of England. This is not normal and we should not lose sight that the economy is still in a state of emergency post Lehman brothers. Since the 2008 crash the Bank of England have slashed rates ...

20 May 2016, 2:43 p.m.
Duncan Richardson

Gold fell to a three-week low this morning after plummeting nearly 4.5% (-£40/ oz t) since Monday. The rising value of both the pound and the dollar have contributed to the drop in the gold price, as news from Britain and USA increased confidence in their respective currencies. The silver price has also fallen by 4.8% (-£0.57/ oz t) in the last week.

Minutes from the Federal Reserve meeting last month revealed an intention to raise interest rates, perhaps as early as June this year. This is the first time that the possibility has been seriously explored since the Fed implemented a 0.25% ...

19 May 2016, 2:42 p.m.
Samuel Gee

Venezuela is on the brink of collapse after decades of socialist rule. Inflation is out of control, food in short supply and gangs are taking control of the streets. In attempt to stop an outright collapse President Nicolas Maduro has declared a two month state of emergency.

The country’s currency is in freefall and the cost of imported goods has skyrocketed causing shortages in basic necessities such as food, toilet paper and medicine. Inflation is expected to reach 700% this year and 2,200% in 2017.

Despite having larger oil reserves than Saudi Arabia the style of socialism introduced under Maduro’s ...

18 May 2016, 10:05 a.m.
Adam Pike

As Donald Trump’s popularity soars attention is now shifting to what a Trump Presidency would look like. If last Thursday comments are anything to go by the global economy is in for a shock. When discussing the U.S. government debt on CNBC, Trump broke with convention and replied “I am the king of debt, I love debt, and I love playing with debt.” Trump, like all recent presidents, has no answer to the simple fact that they have to borrow to keep the show on the road.

The U.S deficit is now over $19 trillion and if you add on ...

17 May 2016, 9:48 a.m.
Duncan Richardson

Investors are returning to the yellow metal as fears grow central banks may slash interest rates further. Uncertainty surrounding the outcome of the UK’s EU referendum is also weighing heavy on the global markets.

Gold demand rose 21% in the first quarter of 2016 to 1,290 tonnes, the largest quarterly increase since records began. Exchange Traded Funds have experienced considerable inflows as investors seek safety from a slowing and fragile economy.

Exchange traded funds are an easy way to gain exposure to the gold price, however, many are backed by derivatives and many speculate there is no gold backing them.

16 May 2016, 9:35 a.m.
Peter Walden

The gold market is becoming more and more dislocated. After a frustrating four year correction the gold price is once again in the ascendancy. Money is flowing in exchange traded funds, physical bullion and Comex contracts.

Demand for paper gold has been so strong that available gold at the Comex is now dangerously low.  The amount of paper claims versus physical gold held at the Comex has exploded to 564-1. There is more chance your child will gain entry to Yale, Standford and Yale than receive physical delivery from a Comex gold contract.

Investors in the trading pits are as ...

13 May 2016, 9:51 a.m.
Duncan Richardson

After bashing gold for the last four years, financial institutions are finally turning bullish on the future of the yellow metal.

Despite the gold price trading close to a 2 week low, JP Morgan are forecasting this is merely a blip and the price is set to break through $1,400 per ounce in 2016. In a negative interest environment gold is becoming more and more attractive to investors.

JP Morgan’s head of fixed income, currencies and commodities, Solita Maccelli, believes in the long term gold could potentially replace government debt as the ultimate safe haven asset. Despite this extremely bullish ...

11 May 2016, 11 a.m.
Adam Pike

After a strong start to the year the gold price fell back 1.6% yesterday on the news the Greek Parliament had agreed yet another reform package. The Greek government can now tap their fellow Eurozone members for more funds and stop the country defaulting on their sovereign debt.  

The reforms put forward by Greek premier, Alex Tsipras, will increase the tax burden on the rich and reduce social spending on the poor.

Thousands demonstrated in Parliament Square, but yet again the will of the people was ignored. The Greek economy is in a mess and the social fabric of ...

10 May 2016, 9:48 a.m.
Duncan Richardson

The gold price may be up over 20% so far this year, but the London gold market could be facing its biggest problem since the failure of the London gold pool in 1968.

This is the claim by London strategist, Paul Mylchreest, who believes the amount of physical gold left is approaching zero.  According to Mychreest increased demand from form China and Exchange Traded Funds (ETF’s) is causing the vaults to run dry.

The London gold market is the largest in the world and the center for unallocated gold trading. If there is no physical left there is nothing to ...

9 May 2016, 10:12 a.m.
Duncan Richardson

I am afraid to be a bearer of bad news, but the UK economy is starting to tank. The growth generated post Lehman via endless rounds of quantitative easing is now flat lining. Certain sectors and business are now suffering as unemployment rises.

Bad decisions were made following the 2008 crash and we are now starting to feel the consequences. Demand, exports and investment is slowing and it feels like we are leaving the eye of the storm.

The purchasing manager index, the most reliable non-government data is pointing to a slowdown while business leaders across the country are suggesting ...

6 May 2016, 10:23 a.m.
Duncan Richardson

There’s no doubt china is building one of history’s largest ever stockpiles of gold. Last week China launched the much anticipated Shanghai gold fix in attempt to wrestle the gold pricing mechanism away from western banks. China is also the world’s largest producer and consumer of the yellow metal. These actions should leave us in no doubt China wants to control the gold market. The Chinese government has also spent years encouraging their population to buy physical bullion.

Officially the Chinese government has 1,658 tonnes of gold, however, experts who analyse global gold flows believe this figure could be between ...

5 May 2016, 9:50 a.m.
Duncan Richardson

After 3 difficult years for the gold price it looks like the yellow metal has finally turned the corner.  The gold price briefly broke through the psychological $1,300 per ounce barrier on speculation the Federal Reserve will delay any future rate rises.

Since the turn of the year investors have piled back into exchange traded funds. Across the ETF sector holdings rose by 21.6 metric tonnes to 1,780 tonnes, a 22% increase.  As the rally continues mainstream pundits are now forecasting the price to reach $1,400 per ounce.

The recent rally has been ignited by the Federal Reserve’s omission that ...

3 May 2016, 10:17 a.m.
Duncan Richardson