Publications

China has given domestic and international banks permission to import large amounts of gold into the country.

Derivatives can only be netted down on the basis that counterparties pay up. But in a real systemic crisis, counterparties will disappear and gross exposure will remain gross.

The increase in expected and actual inflation rates combined with the Fed’s dovish stance could create downward pressure on the real interest rates and the U.S. dollar, thus supporting gold prices. The yellow metal could also benefit from the elevated demand for inflation hedges in an environment of stronger upward pressure on prices.

Gold is today at a price that still does not take into account what has happened these last months and what will happen with respect to the coming avalanche of Treasury auctions to come.

After several months of shared reflection with our clients, we are pleased to announce the implementation of a new storage fees schedule. The calculation of storage fees is now based on the value of your assets, not anymore on the number of ounces held.

Banks, and hence banking risk, come in a wide variety of flavors, largely because bank mismanagement and short-sighted absurdity comes with equal frequency. As such, a fuller discussion on banking risk would necessitate hundreds of pages and hundreds of examples.

Inflation is coming. Gold may benefit from it, especially if inflation turns out to be more long-lasting than central bankers and markets believe.

Warren Buffett called derivatives financial weapons of mass destruction and he is absolutely right. Greedy bankers have now built derivatives to a self-destructive nuclear weapon. Archegos shows the world that an unknown smaller hedge fund can get credit lines of $30 billion or more that quickly leads to contagion and uncontrollable losses.

The National Bank of Hungary has tripled the country's gold reserves, it said in a statement. MNB took the decision to raise the gold reserves "taking into account the country's long-term national and economic policy strategy objectives".

Inflation expectations continue their dizzying increase: the 10-year expected inflation went up from 0.8% to 2.4% in only a few months... Against such a background, gold has, of course, continued its upward movement, following its worst first quarter since 1982.

The movements are alternating and now we are ready for another up leg. Double bottom and indicators suggest getting ready.

Despite all the reasons discussed in preceding reports (i.e., money supply, commodity super cycles, deficit spending, and governmental credit guarantees to commercial banks) as to what we see as the current as well as future inevitability of rising inflation, there are many credible individuals, including those who strongly favor gold, who see a very different horizon.

Gold’s reaction amid the surprisingly strong nonfarm payrolls report and the accompanying rise in the bond yields could be seen as encouraging. Some analysts even believe that the yellow metal has bottomed out.

Getting out of stocks and holding physical gold will not only be a seminal decision but it will also heed 2,500 years of wisdom that Confucius taught.

How will Biden’s infrastructure plan affect the gold market? In the long-run, higher government spending, public debts, inflation, and corporate taxes should hamper the pace of economic growth and weaken corporate America and Wall Street. Hence, the proposal could be positive for gold prices, at least from the fundamental point of view.