March Gold News 2021

Archegos Capital, the hedge fund owned by Bill Hwang (formerly of Tiger Management), is at the centre of attention in the financial world following a 'fire sale' on Friday; the forced liquidation of positions due to margin calls and the need to free up funds to meet these repayment obligations.

Japanese bank Nomura Holdings, Mitsubishi UFJ Securities, and Switzerland’s Credit Suisse all announced that Archegos' losses would hit them as a result, with $6 billion being touted as the global total lost.

A host of economic issues has added further uncertainty for the global economy in the past few days. Both geopolitical concerns as well as the ongoing coronavirus pandemic have served to give gold a small boost following its recent price pressure.

Having fallen as low as £1,213.79 per ounce earlier this month, gold has been making gradual gains since, and is now up just over 4% and trading at around £1,260 per ounce today.

A dovish Federal Reserve attempted to reassure markets last night that interest rates will remain low for some time yet, regardless of improving economic recovery, and potential inflation. Despite some initial signs of success, market uncertainty appears to have remained this morning.

Following months of delay, the United States has finally approved a coronavirus rescue package, worth $1.9 trillion. The ‘American Rescue Plan’ authorises several federal spending measures, as well as providing financial relief in the form of cheques to millions of American families following a year of the Covid-19 pandemic.

Rising bond yields have pushed gold to a ten-month low in Dollars, as markets price in economic recovery and rising inflation.

Since reaching a new Dollar record in August 2020 gold has come under pressure from increasing optimism over the potential end of the Covid-19 pandemic.

Chinese officials have aired their concerns over the stock market bubble in America and Europe, cautioning against over-commitment to stocks and shares for fear of a market collapse.

China is warning that without restraint now we could see a repeat of the Dot Com Bubble in 2000-2001. Bloomberg subsequently reported a big impact to Chinese stocks on Tuesday, with the CSI 300 index down 2.1%.

Chancellor Rishi Sunak has pledged billions more in support for businesses and individuals in another pandemic-focused UK Budget.

As is common in recent years, many of the measures were announced prior to the official statement, and confirm that financial support will continue for several months as the UK, hopefully, eases restrictions after a year of the Covid-19 pandemic.

Factories in the UK, EU and US have all reported increasing costs, in what could be some of the first indications of inflation to come in the months ahead.

Yesterday’s PMI figures showed that factory output in the UK also fell to the lowest rate in nine months, when growth returned following the end of the UK’s first lockdown.