June 2018 Review
Liam Sheasby, News Editor
13 Jul 2018, 4:50 p.m.
June was a disappointing month for bullion and other commodities. Prices fell across all three major currencies and all four major precious metals as the US trade tariffs ramped up their obstructions to free trade between the EU, China, and America.
Initially the price of gold was up as the UK’s inflation level remained even. The Pound made gains thanks to a revision of Q1 growth from the Office for National Statistics (up to 0.2% from 0.1%) which kept gold rom climbing over the £990 mark, but prices were high. The announcement of the European Central Bank that it was going to stop Quantitative Easing was a bonus, with investors turning to gold to stock up their reserves ready for the EU’s stabilisers to come off.
The change for precious metals came following the rise in US interest rates. A quarter percent rise from 1.75% to 2% gave investors renewed confidence in the American economy and in the Dollar as a result. Prices across the board tumbled – all of which came as the United States began to escalate its trade dispute with China. Tariffs had already been implemented as a global charge, upsetting the likes of the UK, Canada, and Mexico, but China’s willingness to retaliate and stand firm have since turned into a head to head feud.
GBP : Jun 1st = £977.92, Peak = £986.80, Low = £948.85, Jun 30th = £948.89, Gain/Loss = - £29.03
USD : Jun 1st = $1,299.38, Peak = $1,305.23, Low = $1,248.28, Jun 30th = $1,253.00, Gain/Loss = - $56.95
EUR : Jun 1st = €1,111.30, Peak = €1,124.94, Low = €1,072.45, Jun 30th = €1,072.45, Gain/Loss = - €38.85
GBP : Jun 1st = £12.38, Peak = £12.99, Low = £12.19, Jun 30th = £12.20, Gain/Loss = - £0.18
USD : Jun 1st = $16.42, Peak = $17.19, Low = $15.98, Jun 30th = $16.10, Gain/Loss = - $0.32
EUR : Jun 1st = €14.03, Peak = €14.88, Low = €13.78, Jun 30th = €13.79, Gain/Loss = - €0.24
PLATINUM = £684.26 to £645.59 = - £38.67.............PALLADIUM = £744.94 to £723.60 = - £21.34
BITCOIN = £5,632.70 to £4,811.87 = - £820.83..........CRUDE OIL = $66.88 to $73.37 = + $6.49
While the trade war is the current centre of attention, information about the US yield curve is also something quite important to be aware of. This month was the first time that the yield’s curve inverted, meaning that 10-year yields were a better speculative option than 2-year bond yields. This has been a common precursor of recession (though not always) and could be a sign of trouble to come. The question is whether this trouble will come in the next two months or the next two years.