We write to you at the end of another eventful week. The gold price has had a notable one marked by economic data, policy decisions and geopolitical events. We have seen some safe haven buying following the assassination of a Hamas leader in Tehran which has increased the risk of major uptick in military action in the Middle East, possibly including a direct confrontation between Israel and Iran.
The Bank of England’s MPC have just released their interest rate decision with a 0.25% cut, bring the key rate to 5%. Markets were waiting to see if the BOE would pull the trigger which would be the first rate cut since 2020. There was some uncertainty whether a rate cut would come as inflation has remained stubbornly high but it appears these pressures are finally starting to ease.
Elsewhere, the FOMC surprised exactly no one by maintaining rates, yesterday. The Committee would like to see more progress of annual US inflation heading back towards 2%. Earlier in the day the Bank of Japan raised its main interest rate to 0.25% from zero. It also said it would reduce its government bond buying by half, prompting the Yen to rally against the dollar.
Will the US election result impact the price of gold? That’s what Jan Skoyles is asking this week. Interestingly research from the World Gold Council finds that historically there has been very little volatility in the gold price, in the period surrounding the US election. But what of the longer-term impact, and does it matter which party has control of Congress. We cover it all.
In case you missed our interview with the legendary investor Jim Rogers, then you can catch up here. It’s always interesting speaking with Jim. For someone who has been investing for over half a century his perspective is one that is a fine balance of experience and fresh observation. His concerns about the US economy and global financial system certainly seem to grow between each of our conversations, so it’s interesting to hear how his portfolio allocations change. Needless to say he holds precious metals – but there is a real focus on silver right now.
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