January Gold News 2019

The US Federal Reserve announced last night that interest rates would remain between 2.25% and 2.5%, with the Fed preparing for a slower year of economic growth in America.

Annual gold demand was up in 2018, with the highest Central Bank purchases in 50 years helping to drive demand, but with reported shrinking of Silver supplies could 2019 be the year Silver’s price begins to rise?

Italy’s economy has slipped back into recession following a poor end to 2018. ISTAT, the Italian National Institute of Statistics, reported that between October and December the economy contracted by 0.2%.

Prime Minister Giuseppe Conte accidentally revealed the decline of the Italian economy at an event in Milan yesterday, and added that the first half of 2019 is likely to be similarly poor.

The price of gold has climbed above the £1,000 per ounce mark once again, after last night’s series of Brexit votes in the House of Commons.

MPs gathered to cast their votes on seven amendments to the Prime Minister’s Brexit deal, which remarkably featured Theresa May backing Sir Graham Brady’s amendment to abandon the Irish backstop and enter renegotiations with Europe – something she had previously arranged and said was not possible to amend.

The CEO of the Russian trading floor Moscow Exchange has suggested to Russian MPs that his company – and the wider country – should utilise its position as the third largest producer of gold in the world and offer gold to investors as an alternative to the US Dollar.

In the wake of Bitcoin’s latest slump, one CEO believes that Bitcoin’s moment of glory is over, and those who bought into it are now realising that gold, not Bitcoin, is the long-term haven to back.

Police in Hong Kong have arrested 12 men and two women who they believe are responsible for running a gold scam in the Chinese special territory.

The World Gold Council believes 2019 will see an increase in demand for gold, which will subsequently drive prices up as the year goes on. The latest publication from the WGC stated that they “expect that the interplay between market risk and economic growth in 2019 will drive gold demand”.

The price of gold in US Dollars was relatively flat and stable in 2018, ending the year down by 1.5% and recording the first annual decline in gold price since 2015, but in 2018 gold set record high prices or near highs in 72 currencies, and came close to records for the likes of the Pound Sterling, Swiss Franc, Euro and Chinese Yuan - all of which suffered from the US Dollar’s fierce rise in popularity.

The Pound Sterling rose to a two-month high point yesterday following another flat and progress-lacking round of Prime Minister’s Questions in the House of Commons.

Sterling reached $1.30 and €1.14 respectively as of yesterday’s morning trading, and has held these levels since, with investors confident that a no-deal Brexit scenario is all but certain to be avoided.

New sales figures from the United States Mint show that demand for the 1oz Eagle coins has already surpassed that of January 2018, with 10 days of trading still to be accounted for.

Russia has officially overtaken China to rank fifth in the world for the largest central bank holding of gold bullion, with only the US, Germany, France and Italy ahead of it.

Zimbabwe is seeking to be readmitted to the London Bullion Market Association this year and accredited as a trusted gold producer. The African nation was removed from the LBMA in 2008 after failing to meet its required 10 tonne output for the year but has since renewed its gold mining and consistently met this target since 2013 - more than the three years required by the LBMA.

The chairman of the Bank of England, Mark Carney, told MPs in Parliament yesterday that the financial markets are now quite confident that there will not be a No Deal scenario for Brexit, with many firms factoring in the strong opposition to Theresa May’s Brexit deal as the same opposition to no-deal.

Prime Minister Theresa May suffered the largest defeat in history in the House of Commons last night, with 432 MPs voting against her Brexit Withdrawal Agreement and only 202 in favour.

The result means that the PM’s deal is now dead, and with the EU saying that this was the only deal available to the UK for leaving it now brings up a very realistic prospect of a No Deal scenario.

• Deal would create the world’s largest producer of gold
• Similarities with Barrick Gold’s deal to buy Randgold in September for $6.1 billion
• Company will be called Newmont Goldcorp and listed as NEM
• Combined output of 7.9 million ounces of gold in 2017
• Forecasts of $100 million saved per year following $1 to $1.5 billion of asset sales

US financial services giants JP Morgan today reported a drop in earnings, resulting in their first missed profit forecast in 15 quarters.

JP Morgan recorded a $7.1 billion profit for the year – a 70% increase vs 2017 – but the fiscal results published show that JP Morgan earned $1.98 per share in the last quarter, compared to estimates of $2.21 per share.

The UK economy is at a six-month low for economic growth after new statistics published on Friday showed a 0.8% reduction in growth for manufacturing – with car production the biggest sector hit.

Prime Minister Theresa May issued a warning today that Parliament is more likely to block her Brexit deal than approve it, which is tantamount to “betraying the vote of the British people”.

The value of the US Dollar dropped on Wednesday following the news that the United States and China had made progress towards resolving their ongoing trade war after three days of discussions in Beijing.

The latest figures from the World Gold Council and other agencies show that gold-backed ETFs grew by 3% in 2018, with an additional 69 tonnes purchased last year – a value equivalent of $3.4 billion US Dollars.

The price of palladium is still on the rise in 2019 after a year of gains in 2018. The price per ounce is now $1,333.21 (£1,044) – higher than the gold price in GBP and a staggering $500 (£400) per ounce more than the value of an ounce of platinum.

Twenty Conservative MPs have rebelled against their own party and voted with the opposition yesterday in favour of an amendment to the latest Finance Bill; the first time the UK Government has lost a Finance Bill vote since 1978 – 41 years ago.

The Blackwater gold mine in New Zealand is to be brought back into production under the operation of Tasman Mining, with $500 million proposed spending and the creation of 100 jobs locally.

The US Mint has reported that demand for its gold and silver American Eagle coins was an 11-year low; the weakest point since just prior to the financial crisis.

Argentine mining firm Patagonia Gold PLC has acquired four new exploration blocks for potential future gold mining.

Tech giants Apple have reported the loss of $9 billion in 2018 through their share buyback programme.

Chinese scientists at the Dalian Institute of Chemical Physics have stumbled upon a way to transform copper into a metal with properties similar to gold and silver.

The price of gold hit a one-year high yesterday at £1,024 per ounce as Brexit, poor global economic performances, trade fears, harsh debt levels, and the US government shutdown all continue to weigh on investor confidence.

The UK Treasury has appointed two new external financial experts to the Bank of England’s Financial Policy Committee (FPC). Dame Jayne-Anne Gadhia and Dame Colette Bowe will begin their three-year terms in March and June respectively, working to spot risks to the UK’s financial stability.