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Updated 23:36 10/05/21

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September Gold News 2016

Deutsche bank shares have plunged a further 8% this morning following the news that a number of major hedge funds have withdrawn cash from the stricken bank. Bank representatives have been quick to deny the report and reassure investors, but it appears as though confidence is evaporating.

Shares in Germany's largest bank started to tumble last week after U.S. authorities fined the bank £10.5bn for misselling mortgage-backed securities in the lead up to the 2008 crisis. Deutsche Bank’s market capitalization has fallen over 60% since October, a fall which reflects a deeper concern about the health of the bank. 

The real problem ...

30 Sep 2016, 11:18 a.m.
Duncan Richardson

With much of the world’s attention understandably focussed on the decline of Deutsche Bank, one would be forgiven for not noticing the plight of another major German bank – Commerzbank.

Shares in Commerzbank share prices have fallen nearly 2% this morning after Germany’s second largest bank announced that it will make nearly 10,000 redundancies as well as suspending dividends as part of a major firefighting effort to improve the lender’s profitability. The large scale restructuring programme comes after a recent decline in earnings raised concerns about the bank’s viability.

These measures are part of a plan which, at face value, ...

29 Sep 2016, 12:54 p.m.
Samuel Gee

The International Monetary fund (IMF) has warned urgent action is needed to halt the decline in global trade. The rise of protectionism and anemic growth has led to a rise in unemployment and a slowdown in global trade

The warning comes as the World Trade Organisation (WTO) reduced their growth forecasts and called for policymakers to wake up before it’s too late.

It appears history is repeating, following the stock market crash and depression of the 1920’s countries pulled up the drawbridge to global trade. Politicians embraced these policies to appease domestic voters, but ultimately they hindered economic growth and ...

28 Sep 2016, 10:32 a.m.
Duncan Richardson

Analysts at Citigroup have warned that the next few months could be volatile for precious metal and foreign reserve markets, with several economic and geopolitical factors expected to have a large impact.

2016 has already been an interesting year for gold, with the precious metal currently up by 44% (£+318.506/ oz t) since January. However with the impending conclusion of the US presidential race, the addition of the Chinese RMB to the SDR, and the possibility of US interest rate hikes in December (however unlikely) Citigroup have upgraded their gold price forecasts for the end of the year.

The American ...

27 Sep 2016, 11:30 a.m.
Samuel Gee

Deutsche Bank AG’s share price has plunged 6% this morning on the news that German Chancellor Angela Merkel dismissed the possibilities of state intervention to help the struggling bank. The German bank’s share price continues to fall towards zero as its dire health becomes increasingly obvious. In contrast, the gold bull run has continued, with the precious metal up by 2.65% (£+26.18/ oz t) in the last week.

Since 2007, Deutsche Bank’s share price has lost over 90% and almost 50% this year. Its recent refusal to pay a $14 billion fine to the US Department of Justice has raised ...

26 Sep 2016, 3:08 p.m.
Samuel Gee

Despite massive amounts of money printing and central bank intervention large parts of the Euro zone are on the verge of falling into a deflationary spiral. The ECB has done everything in its power to kick start the economy following the 2008 meltdown, but it now seems the ECB has finally run out of ammunition.

The ECB downgraded its GDP growth forecast and admitted there is little chance the bank will reach its 2% inflation target anytime soon. QE and negative interests have so far kept the show on the road but real growth has remained illusive. In Brussels bureaucrats ...

23 Sep 2016, 9:57 a.m.
Duncan Richardson

The gold price spiked to its highest levels since 9th September following Janet Yellen’s decision not to raise interest rates. The gold price rose in tandem with stocks as the FTSE climbed over 6800 points as markets digested the news.

The gold price was also boosted by the Bank of Japan’s announcement to continue with their own money printing program. The Fed has now backed themselves into a corner with no easy escape. Despite all the rhetoric and the dubious jobs numbers the Fed must know the U.S economy is slowing and raising interest rates would only exacerbate the slowdown.

The ...

22 Sep 2016, 10:49 a.m.
Adam Pike

85 years to the day Bank of England officially abandoned the gold standard. The gold standard was the corner stone of the global economy and when the UK removed the link between gold and the British pound the whole monetary system unraveled.

Canada, Japan, Denmark, Finland and Sweden soon followed suit and within 10 years France, Holland and Belgium followed our lead.

Following the aftermath of World War II, 44 countries met in the plush resort town of Bretton Woods to reshape the global economy and ensure post war prosperity. World War II had decimated the global economy and America took ...

21 Sep 2016, 11:51 a.m.
Duncan Richardson

China’s financial system could be on the verge of a debt crisis, according to the Bank of International settlements (BIS). China’s total debt, which includes government, corporate, and household debt, now tops $25 trillion which is equivalent to 255% of the countries Gross National Product. 

As growth slowed the Chinese government responded with unprecedented levels of money printing. The emerging giant has become addicted to cheap credit and any rise in borrowing cost could potentially burst the country's debt bubble. China is no longer considered a poor relation and should the economy contract the effects would be felt globally.  

The BIS ...

20 Sep 2016, 9:52 a.m.
Adam Pike

Since rates were increased by 0.25% at the end of 2015 the Fed have often toyed with the idea of a rate hike – without ever committing to one.  Investors have been kept guessing as to the Fed’s plans for interest rates and, despite recent statements signalling otherwise, they appear set to remain unchanged this week.

Stock markets have experienced a relatively strong start to the new week in what could be a strong indicator that rates will remain unchanged on Wednesday, when the Fed are expected to make an announcement. With markets now seemingly addicted to low interest rates ...

19 Sep 2016, 3:26 p.m.
Samuel Gee

Deutsche Bank shares have suffered a huge blow after the German giant refused to pay a $14bn fine demanded of it. The US Department of Justice have called for the bank to pay up following an investigation into the sale of mortgage-backed securities.

European stock markets have plummeted to their worst week in three months, with banks falling the furthest – Deutsche Bank stocks lost 8.4% while RBS Group and Credit Suisse Group both fell by over 4.8% - as further doubts were raised concerning the strength of Europe’s major banks.

After a period of relative strength it appears as ...

16 Sep 2016, 5:04 p.m.
Samuel Gee

Once again, the Fed have refused to commit to increasing interest rates, despite making all the right noises in the lead up to their latest meeting.

This could come as good news to stock markets, which have become dependent on cheap money to keep them afloat.

Loose monetary policies such as quantitative easing and lower interest rates were intended to stimulate growth by increasing the money supply and making it easier for banks and private individuals to borrow money- thus making it easier to spend.

However it has simply not worked.

While the central bank tactic of using cash injections ...

14 Sep 2016, 12:06 p.m.
Samuel Gee

Despite their traditional disregard for gold and silver, central banks have begun to invest in precious metals mining companies, having sold off large parts of their physical bullion in recent years.

Although bankers often tend to take a negative stance on precious metals, some central banks are now choosing to invest their paper money into this more durable industry.

Both the Norwegian and Swiss Central Banks have recently printed close to $1 billion each, moving these funds directly into precious metals mining companies.

Should we view this changing attitude towards gold and silver as a sign that central banks are ...

12 Sep 2016, 12:23 p.m.
Samuel Gee

The National Institute of Economic and Social Research (NIESR) has warned that the UK still faces a serious risk of recession by the end of 2017, despite recent surveys showing signs of growth.

According to their latest report, the monthly GDP estimate indicates a 0.3% growth in output in the 3-month run up to August, a significant drop from the 0.6% recorded for Q2 of this year, indicating that the UK economy is indeed slowing down.

The UK economy has struggled to grow significantly in 2016 and the latest signs of stagnation are an indication that the probability of another ...

9 Sep 2016, 12:17 p.m.
Samuel Gee

Stock markets have fallen today after the European Central Bank decided against extending quantitative easing beyond the next six months.

The ECB was largely expected to provide fresh stimulus to the economy through the printing of more money. Its ongoing bond-buying programme has gone a long way in propping up the stock markets in recent months, with central banks printing money to purchase assets. However Draghi’s refusal to commit to extending the programme has knocked confidence, seeing major European exchanges dip, with the DAX Index falling by more than 1.16% while the CAC 40 fell 0.86%.

The ECB finds itself ...

8 Sep 2016, 3:28 p.m.
Samuel Gee

In a stunning development clients of Deutsche Banks who invested in the Xetra-Gold trading platform have been denied access to their gold. 

Despite Xetra-Gold claiming for every gram of gold held by each investor there is an equivalent amount of gold on their behalf, a number of investors have had their requests for physical delivery denied.

It’s still not clear if other banks which use the Xetra-Gold Trading platform have also failed to deliver gold to their clients.

Xetra-Gold claims it has over 85 tonnes of physical gold, however, this is now in question. If the exchange is struggling to ...

2 Sep 2016, 2:44 p.m.
Duncan Richardson

The yellow metal has been one of the best performing asset classes in 2016, boosted by political uncertainty and ultra-low interest rates. Year-to-date the gold price is up over 24%, but still below the all-time high of $1,895 per ounce it reached in 2011. However, when adjusted for inflation, gold should be trading well over $2,000 per ounce.

Gold has always been bought as an insurance policy and, unlike a bond or deposit account, does not pay interest. A surging gold price usually means that traders are worried about the safety of traditional assets such as stocks and bonds.

The ...

1 Sep 2016, 10:50 a.m.
Duncan Richardson