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January Gold News 2017


Banks must plan for 'hard' Brexit, PwC report warns

Banks must plan for 'hard' Brexit, PwC report warns

Global banks must plan for a “hard” Brexit or risk breaching regulatory requirements and disrupting business, according to an industry report seen by Reuters, the first since Prime Minister May said she would take Britain out of the single market.

Banks' transformation programmes are so complex and lengthy that in some cases they may need to devise two-step interim contingency plans in order to mitigate the risks of disruption, the report says. It was prepared by consultancy PwC for industry body the Association for Financial Markets in Europe (AFME).

The process will require more clarity from regulators in EU countries ...

Bank of England pumps £5bn into firms and £20bn into banks to keep interest rates down

Bank of England pumps £5bn into firms and £20bn into banks to keep interest rates down

England’s quantitative easing scheme rolled out last year, borrowing far more than anticipated from the central bank.

The Bank of England bought £4.9bn of corporate bonds in just three months, when the scheme intended to buy £10bn over 18 months.

At the same time the Term Funding Scheme (TFS) which gives cheap funds to banks has injected £20.7bn into lenders. The aim of both policies, alongside a plan to buy £60bn of government bonds, was to keep interest rates down.

Economists welcomed the swift progress as an important boost ...

What's really going on with the economy

What's really going on with the economy

The UK economy is not in recession. That much we know. But what about its component parts?

Did you know, for instance, that for all the enthusiasm about Britain's motor industry, car manufacturing actually dropped into recession in the wake of the Brexit vote?

Did you know that the domestic workers sector (meaning cleaners, nannies and anyone else who works as an employee in a home) is booming?

Or that the postal and courier sector is growing faster than almost any other part of the UK economy?

Did you realise that Britain's economic growth is actually by some measures now ...

Deutsche Bank: Sterling risks losing reserve currency status

Deutsche Bank: Sterling risks losing reserve currency status

The recent decline in the value of the pound has led Deutsche Bank to claim that its status as a reserve currency is under threat. The German bank cited the minimal impact of sterling’s fall in 2016 on other currencies, alongside its falling presence in China’s reserves, as evidence of sterling's increasing irrelevance as a foreign exchange reserve currency.

The German bank have predicted that Brexit could be the final straw for the pound’s reserve status. With foreign demand for sterling such an important inflow into the UK economy, any sudden decline in reserve holdings of sterling could leave a significant ...

Free cash machine network under scrutiny

Free cash machine network under scrutiny

More than half of free cash machines in the UK are under threat as some banks demand reductions in the fees they pay to use other providers’ ATMs.

A system known as LINK currently allows customers of all banks to use other providers' cash machines free-of-charge, but that is now in question. Banks say they pay too much for the use of independent cash machines from providers such as such as Note Machine and PayPoint.

Members of LINK, including banks and independent ATM providers met on Thursday in an attempt to resolve the dispute, but the issue remains ongoing. If ...

Gold Slips as Sterling Rebounds

Gold Slips as Sterling Rebounds

Sterling’s rebound following Theresa May’s Brexit speech this morning saw the gold price drop (2% £20.04/oz t) in less than 3 hours.

The gold price had jumped above £1000 since the weekend after the pound slid on expectations that May would confirm Britain’s intentions to make a clean break from the European single market after triggering Article 50. She confirmed her intentions earlier today in her public statement.

However her announcement that the deal would be agreed upon by parliament provided a boost to the pound, which has jumped 2.83% against the dollar today.

Pound Drops and Gold Jumps Above £1000 on Hard Brexit Expectations

Pound Drops and Gold Jumps Above £1000 on Hard Brexit Expectations

Gold has jumped 1.44% (£+14.10/ oz t) in sterling and 0.43% ($+5.10) in dollars this morning, marking the beginning of what is likely to be an interesting week for financial markets.

Gold priced in sterling jumped above £1000/ oz t, hitting its highest price since November after the pound fell 1.6% to below $1.20, the lowest since October’s ‘flash crash’. Reports that PM Teresa May is likely to announce a hard Brexit on Tuesday knocked the pound with investors showing little optimism for the post-Brexit British economy.

Regardless of the potential long-term success of prospective commercial deals with non-EU countries, ...

Gold Jumps as Dollar Slides after Trump Press Conference

Gold Jumps as Dollar Slides after Trump Press Conference

Gold rose for a fourth consecutive day thanks to a weakened dollar after Donald Trump’s first formal press conference since winning the election in November.

A lack of time spent discussing Trump’s expected fiscal stimulus plans led to a market sell off as doubts about the long term durability of recent market gains. With Trump’s inauguration just a week away, we will soon witness the reality of Trump’s economic plans.

However with this current level of uncertainty investors are afraid of being caught out should the recent market gains prove to have weak foundations.

As a result ...

U.S. debt explodes by 1 trillion in Obama's final year in office

U.S. debt explodes by 1 trillion in Obama's final year in office

During President Obama’s final year in office the USA's government debt expanded by a further $1 trillion to just below $20 trillion. To put that number into perspective, to spend $1 trillion, you would have to spend £10 million dollars every day for 273 years.

Under Obama’s reign the country's debt has doubled. This may sound horrifying, however, the same occurred under the Bush presidency and countless other administrations.

With Donald Trump pledging to the U.S. electorate he will spend big in a last-ditch attempt to simulate the economy, it is more than plausible that Federal debt ...

3 Key factors guaranteed to move gold in 2017

3 Key factors guaranteed to move gold in 2017

After a three-year losing streak the gold price posted a 31.8% return in 2016. The gain would have been a lot higher if the price had not declined following Donald Trump’s surprise victory in the U.S. election. As we begin 2017, the gold price will be looking to build upon its £933 per ounce starting point. Traders care little for the past and their focus will now shift to examining the potential drivers for the price in 2017.

It comes as no shock the main driver behind the price will be the actions of the Federal reserve. ...

Eurasia Group: 2017 the Most Politically Volatile Year Since WWII

Eurasia Group: 2017 the Most Politically Volatile Year Since WWII

2017 is likely to be the most volatile year in terms of political risk since World War Two, according to political risk consultancy Eurasia Group.

Donald Trump’s impending inauguration as President of the United States has been listed as a leading cause for volatility given his unilateral approach to foreign policy. Trump has already cast doubt on his loyalty to NATO, as well as showed hostility towards China throughout his election campaign and an unstable future is expected as the realities of his presidency unfold.

Closer to home, UK ambassador to the EU, Ivan Rogers, has quit his post ahead ...

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