Gold Monitoring Thread £ GBP only

[Chronos]

The National Debt Crisis Is Coming:

https://archive.is/tMPZ0

[Thelonerangershorse]

9 minutes ago, Chronos said:

The National Debt Crisis Is Coming:

https://archive.is/tMPZ0

THE national debt crisis, or A national debt crisis ?

[HonestMoneyGoldSilver]

4 hours ago, VGfine said:

Can someone who knows about these things answer this question,

If interest rates are cut in August or September which looks likely am I right to assume that the price of gold will fall each time they are cut?

The commonly held view is that gold tends to rise as rates are cut. This occurs because the opportunity cost of holding non-yielding assets like gold decreases. Typically investors compare the return on gold with the risk-free rate, often represented by Treasury yields or returns on savings accounts. When interest rates are high, the opportunity cost of holding gold is significant because investors could earn better returns by placing their money in interest-bearing assets. Conversely, when interest rates are lowered, the attractiveness of these alternative investments diminishes, making gold a more appealing option.

Moreover, gold is perceived as a hedge against inflation and currency devaluation. When rates are cut, the dollar often weakens, making gold less expensive for international buyers, which can drive up demand and prices. Additionally, during periods of economic uncertainty or instability, gold’s status as a safe-haven asset typically leads to increased demand, bolstering its price irrespective of interest rate trends.

However, some argue that lower rates might not always result in higher gold prices if investors anticipate economic recovery and shift their focus to more liquid and higher-yielding assets. Furthermore, historical data shows varied responses of gold to interest rate changes, highlighting the importance of broader economic context including inflation expectations and market sentiment.

While the reduction in opportunity cost from lower interest rates generally supports the view that gold prices will rise, it is crucial to account for a range of economic and market dynamics that can influence gold’s behaviour. It's also worth considering the "front-loading" effect, whereby gold rises in anticipation of rate cuts rather than the moment at which rates are cut - "buy the rumour, sell the news"

[Bratnia]

1 hour ago, HonestMoneyGoldSilver said:

The commonly held view is that gold tends to rise as rates are cut. This occurs because the opportunity cost of holding non-yielding assets like gold decreases. Typically investors compare the return on gold with the risk-free rate, often represented by Treasury yields or returns on savings accounts. When interest rates are high, the opportunity cost of holding gold is significant because investors could earn better returns by placing their money in interest-bearing assets. Conversely, when interest rates are lowered, the attractiveness of these alternative investments diminishes, making gold a more appealing option.

For longer dated bonds/Treasurys/Gilts a move to a lower yield = higher bond prices. The longer before the bond matures the greater that move can be (assuming a flat yield curve). Stocks might be somewhat considered as a undated variable coupon bond. Some with a crystal ball might shift into such longer dated bonds/stocks ahead of the crowd, capture a short term capital gain if that interest rate decline occurs, and then sell to shift the sale proceeds into short term bonds/notes/bills if they believe the next move will be a interest rate increase.

Quote

It's also worth considering the "front-loading" effect, whereby gold rises in anticipation of rate cuts rather than the moment at which rates are cut - "buy the rumour, sell the news"

Precisely. All depends on the overall tilt of the market, where the collective majority might have moved ahead of predicated/anticipated interest rates changes and perception of where subsequent better 'value' lays.

Was it Buffett or Graham who suggested

Quote

In the short run, the market is a voting machine, but in the long run, it is a weighing machine

Human nature and voting can produce some weird (unexpected) outcomes.

[Chronos]

Is China Hiding How Much Gold It Really Has?:

https://www.moneymetals.com/news/2024/06/21/is-china-hiding-how-much-gold-it-really-has-003270

[Agaupl]

2 hours ago, Chronos said:

Is China Hiding How Much Gold It Really Has?:

https://www.moneymetals.com/news/2024/06/21/is-china-hiding-how-much-gold-it-really-has-003270

I know how China feels.. I’m married 🤣

[bobski]

Live Gold Price

Au

Current Price

£1,826.47

Live Change

0.01% £+0.01

Live high £1,827.00

 

Live low £1,825.56

[Paul]

50 minutes ago, bobski said:

Live Gold Price

Au

Current Price

£1,826.47

Live Change

0.01% £+0.01

Live high £1,827.00

 

Live low £1,825.56

Bobskis back! we all thought you had gone mountain hiking in Tenerife 

[Bratnia]

On 25/06/2024 at 15:28, VGfine said:

Can someone who knows about these things answer this question,

If interest rates are cut in August or September which looks likely am I right to assume that the price of gold will fall each time they are cut?

Rather than trying to predict you can do OK/well with just accepting what's given on average. Looking for instance at the yearly best asset out of UK FT250 stock index, US S&P500 stock index (both total returns, £ adjusted) and gold, and they each tended to be the years best asset in around a third of years, but in a largely unpredictable manner/sequence.

Hold a third in each, rebalancing once/year at/around the end of financial year (so gains/losses can be taken in the old/new financial year according to whichever might be the more tax efficient) and more often that works out better than if you tried to predict things.

Note that the Callan table indicates entire end of March to end of March gains/losses for each individual asset, the lower line chart however reflects having rebalanced all three to equal weights each month.

Edited June 26 by Bratnia

[BLOOMMAN101]

[BLOOMMAN101]

[Chronos]

Yen Tumbles To 1986 Lows After Japanese 'Currency Chief' Comments:

https://www.zerohedge.com/markets/yen-tumbles-1986-lows-after-japanese-currency-chief-comments-gold-oil-bonds-dump

Market Spooked By Big Bet Fed Will Cut 300bps By Q1 2025:

https://www.zerohedge.com/markets/market-spooked-big-bet-fed-will-cut-300bps-q1-2025

[Chronos]

France could trigger the next euro crisis:

https://archive.ph/GlSjc

[Thelonerangershorse]

£1820.85

If it continues to slide tomorrow, will the Friday smackdown take us below £1800?

[bobski]

Current Price

£1,821.06

Live Change

-0.03% £-0.38

Live high £1,821.44

 

Live low £1,820.70

[jultorsk]

7 hours ago, Chronos said:

France could trigger the next euro crisis:

https://archive.ph/GlSjc

France is deep in le merde with this election. The garden-variety lefties have formed an alliance with the ultra-commies (led by Melenchon), so the likely outcome is a hung parliament (well, not literally - that's what guillotines are for) with 1/3 leftards, 1/3 macronists and 1/3 LePens. Instead of la clarite that Macron was hoping to achieve, looks more like la complication as the outcome. Quelle catastrophe!

"In a matter of days following the announcement of the elections, four prominent leftwing parties — the Socialists, Communists, Greens and France Unbowed (LFI) — united to form a coalition, the New Popular Front (NFP).

The NFP is trailing behind the RN in the polls and remains a significant margin ahead of Macron’s coalition. While the president has always been critical of the RN, he’s now calling the public’s attention to the dangers of a far-left government. On Monday, Macron warned either a far-right or far-left win could lead to civil war.""

https://www.courthousenews.com/new-left-wing-coalition-in-france-polls-better-than-centrist-but-long-term-durability-is-doubtful/

 

[BLOOMMAN101]

[KRO]

The price had to go up today ready for Friday😀

[James32]

£1841

Just now, KRO said:

The price had to go up today ready for Friday😀

Pension day?

[KRO]

Just now, James32 said:

£1841

Pension day?

tis as it happens, get them 2012s reduced😀special poor pensioners prices

[HonestMoneyGoldSilver]

It was trading at the lower boundary of what's expected this summer ($2280-2450). I've been reassured by the price twice reaching the predicted lows and then rebounding strongly. Same thing with S*****. We still haven't reached the real rocky ground of July/August so not counting my chickens yet, but it appears as if markets agree with the predictions given by several respected analysts in the gold industry that the low really is around $2280 or £1802 roughly at today's FX 

[silversky]

So what caused the bump?  Just a rejection of further declines at support?  Or fears of lurking news somewhere? 

[Bratnia]

Another week before a Labour dictatorship. How long after that before CGT and IHT allowances are removed (including on your private home), and IHT increased to 100%. Along with very high "gift" taxation. Another year or so after that with £10K/year average council tax, £2K/year water rates and that might all just about cover giving all illegals fast tracked legality to stay and bring across their dependents, along with swarms migrating out of rightward moving France. SKS opting for freedom of movement again in order to renegotiate with the EU. But where grannies can no longer afford to remain alone in her 3 bed family home of decades, making room for that to be occupied by multiple families.

I doubt Labour will extend to their 1968 choice of applying a 130% tax rate, but you never know. Sell your paid off house and have to take out a 30% of the value mortgage to cover that!

I sense the start of a era of increased boating accidents. Economic GDP growth due to mass migrations, broken infrastructure, declines in GDP/capita (standard of living) and much flight of capital and decline of inward investment.

What might be the utility/value of gold be under such a scenario? Where you might 'lose' it but where that is blocked from being 'found' again (confiscated). And/or where moving physical gold across international borders leads to excessive cost (confiscation).

[JamesH]

3 minutes ago, Bratnia said:

Another week before a Labour dictatorship. How long after that before CGT and IHT allowances are removed (including on your private home), and IHT increased to 100%. Along with very high "gift" taxation. Another year or so after that with £10K/year average council tax, £2K/year water rates and that might all just about cover giving all illegals fast tracked legality to stay and bring across their dependents, along with swarms migrating out of rightward moving France. SKS opting for freedom of movement again in order to renegotiate with the EU. But where grannies can no longer afford to remain alone in her 3 bed family home of decades, making room for that to be occupied by multiple families.

I doubt Labour will extend to their 1968 choice of applying a 130% tax rate, but you never know. Sell your paid off house and have to take out a 30% of the value mortgage to cover that!

I sense the start of a era of increased boating accidents. Economic GDP growth due to mass migrations, broken infrastructure, declines in GDP/capita (standard of living) and much flight of capital and decline of inward investment.

What might be the utility/value of gold be under such a scenario? Where you might 'lose' it but where that is blocked from being 'found' again (confiscated). And/or where moving physical gold across international borders leads to excessive cost (confiscation).

If things got that bad I’d just move to another country. For now though, guess we’ll see what happens soon eh

Decent day for the yellow stuff £1,839 currently

[Bratnia]

7 minutes ago, JamesH said:

If things got that bad I’d just move to another country. For now though, guess we’ll see what happens soon eh

Fine if you rent, otherwise not easy to walk away from your home of decades with nothing, that for some might otherwise have been a large proportion of their total wealth.