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Updated 14:32 13/05/21

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October Gold News 2016

On Saturday, the Dubai Gold Exchange announced they had successfully gained a trading licence from the Shanghai Gold Exchange to list futures on the Chinese exchange.

This is the first time a gold future denominated in the Chinese Renminbi has been offered outside mainland China. More importantly the Dubai exchange will use the Shanghai benchmark as its pricing mechanism and not the U.S. centric COMEX paper based contract. The SGE is the world’s largest physical gold exchange and has facilitated the sale and purchase of 7.838 metric tons.

The new contract will allow institutional clients to access the Chinese gold ...

31 Oct 2016, 3 p.m.
Duncan Richardson

The Bank of England has demanded Britain’s largest banks disclose their exposure to Deutsche Bank and Italy’s oldest bank Monte dei Paschi.

The request was officially made by the Bank of England’s Prudential Regulation Authority in reaction to the companies falling share prices and £14bn fined imposed on Deutsche bank by U.S. regulators. Further bad news for Europe's largest lender could lead to a large scale sell off in the banking sector.

In reaction to their plummeting share price, Monte dei Paschi is planning to make 10% of their work force redundant, close branches, sell assets in attempt to win ...

27 Oct 2016, 11:25 a.m.
Duncan Richardson

The gold price denominated in dollars has risen sharply since the turn of the year, but continued speculation of an interest rate rise in the U.S. has capped the yellow metal's upward trajectory. Gold is up over 20% in 2016, despite lackluster demand from the world’s largest consumers in both India and China. The driver behind the gold price so far in 2016 has been increased demand for ETFs by managed money in the west rather than physical demand.  

Indian gold imports have plummeted from 1,000 tonnes to a mere 270 tonnes and Chinese imports from Hong ...

26 Oct 2016, 10:22 a.m.
Adam Pike

Following Britain’s historic decision to exit the European Union on June 23rd, sterling has fallen to a six and a half year low against the euro and 30 year low against the U.S. dollar. The last time the pound plummeted was during the 2008 economic crisis. Inflation rose sharply to 5.2% squeezing the disposable income of middle England.

The income of the poor was partially protected as benefits and tax credits rose in line with inflation and social calm remained. This time around there will be no such buffer as benefit increases have been frozen until 2020. This is a ...

24 Oct 2016, 10:01 a.m.
Duncan Richardson

Life does not get any better for Deutsche Bank. Only weeks after being fined $14 bn for mis-selling mortgage-backed securities in the U.S. The German lender has agreed to pay $38 million to settle litigation allegations that they conspired to manipulate silver prices.

Importantly, as part of the settlement Deutsche bank has agreed to blow the whistle on other banks that conspired to manipulate the price. After years of speculation, it appears as though the gold and silver bugs where right all along.

Hopefully, this case will now open the flood gates to a series of class action lawsuits ...

20 Oct 2016, 10:49 a.m.
Duncan Richardson

Former Conservative leader William Hague has hit out against Central Banks warning that they are ruining the global economy.

Since gaining independence from the government in 1997, the Bank of England has had the freedom to set interests rates with the mandate to control inflation and stimulate growth. This power has inevitably been abused and eight years after the 2008 meltdown they are still pursuing the same policies which brought the economy to its knees.

As the middle class shrinks it will be easier for politicians to blame central bankers than their own inept policies. In the aftermath of the ...

18 Oct 2016, 11:58 a.m.
Duncan Richardson

In addition to several rounds of redundancies in recent weeks, Deutsche Bank is now believed to be freezing any further recruitment across the entire company. The German bank’s current issues have been well publicised.

The German Bank’s recent refusal to pay a $14 billion fine set by the US Department of Justice highlighted the extent of their liquidity shortage, prompting a sharp decline in their share price. Although the bank has recovered since two weeks ago, bouts of redundancies and freezing recruitment do not breed confidence in the bank’s health. With derivative holdings that dwarf the entire European Union’s GDP, ...

14 Oct 2016, 12:01 p.m.
Samuel Gee

Gold has jumped 1.27% (£+12.82/ oz t) since the weekend, boosted by the prolonged decline of the pound. With sterling suffering four consecutive days of losses on the back of last week’s late-night flash crash, analysts have promptly cut their forecasts for the currency in the coming months.

The failure of U.K. politicians to promote any confidence in their ability to negotiate a favourable Brexit deal has extended the decline of the pound and the continued political uncertainty surrounding Britain has led analysts to believe that the currency could fall even further in the future. Despite already being abnormally low since ...

11 Oct 2016, 2:51 p.m.
Samuel Gee

Love him or hate him, but you can’t deny Donald Trump has caused a political earthquake.  Clinton and Trump have divided a nation and regardless which candidate wins the presidency on the 8th of November America’s economic and social problems will remain.

Market insiders believe a Trump victory will result in extreme market volatility with a run to safe havens such as U.S. Treasury’s and gold. John Ing President of Maison Placements in Canada is predicting an immediate $100 swing to the upside in the price of gold should Trump prevail. Ing believes the U.S. election result is still in ...

11 Oct 2016, 10:48 a.m.
Duncan Richardson

With Deutsche Bank’s increasingly precarious position casting a dark shadow over the European financial landscape, the reality of the German bank’s enormous derivatives exposure is becoming increasingly worrying.

Concerns have been raised over the potential chaos the collapse of major clearing houses such as LCH and Eurex Clearing could cause should they come into trouble. Branded the new ‘too big to fail’ institutions, derivative clearing houses are the latest target in the European Commission’s efforts to increase the safety of global financial markets.

The EU have drafted a law, due to be published in November, aimed at ensuring the stability ...

6 Oct 2016, 12:45 p.m.
Samuel Gee