Gold, Silver, and Currencies

Economic growth has slowed down in China, with the country record only a 6% increase in GDP last quarter. That would be magnificent growth in a developed nation, but for China, that's the slowest growth in 30 years. The FT reports: China’s economy grew at 6 per cent in the third quarter of 2019 compared with a year earlier, its slowest pace in about 30 years, delivering another blow to global growth and underlining many of the challenges facing President Xi Jinping. The country’s trade war with the US, slowing income growth and cooling manufacturing investment took a toll on the world’s … [Read more...]

With the announcement of a Brexit deal agreed to between Boris Johnson and the EU, the only question left is, can the deal make it through the House of Commons? Johnson's coalition partner, the Democratic Unionist Party, has said it will not back the deal, which means it will have a very hard time passing the House. James Blitz reports in the FT: James Forsyth in The Spectator has a good assessment of where the problem lies. He says Mark Spencer, the Conservative chief whip, calculated last night that if the DUP backs Mr Johnson, the government will win on Saturday with a majority of just … [Read more...]

For decades the gold standard reserve currency of the world has been the American dollar, but now as Eva Szalay and Colby Smith report for the Financial Times, that preeminent role may be at risk. They write: The US dollar has long towered over global markets and finance. But cracks are starting to appear in the edifice. The greenback’s pre-eminent role in official funds and international trade is formidable and unlikely to fade quickly. But the latest data from the IMF on central banks’ reserves show a subtle shift away from the dollar that analysts say could signal a rethink on the … [Read more...]

Over the last year, silver investors who had the patience to hold have found themselves better off than those investing in a S&P 500 index. … [Read more...]

Since President Nixon closed the gold window in August of 1971, the price of gold has increased more than 37-fold. From a price of $40.65 at month-end August 1971, gold has risen to $1,528 today. A $1,000 investment in gold at the end of August 1971 would be worth over $37,000 today—a compounded annual return of 7.8%. How Does Gold’s Return Compare to Stocks and Bonds? Gold’s 7.8% return since August of 1971 compares favorably to the 7.4% return that intermediate-term U.S. Treasury securities delivered over the same time. More surprising to some is that gold has even appreciated more than … [Read more...]

The Turkish central bank is employing short-term borrowing to bolster the lira. Investors and currency traders are uneasy with the actions. Laura Pitel and Adam Samson report for the FT: Turkey’s central bank has bolstered its foreign currency reserves with billions of dollars of short-term borrowed money, raising fears among analysts and investors that the country is overstating its ability to defend itself in a fresh lira crisis. Reported net foreign reserves held by the central bank stood at $28.1bn in early April — a sum that investors already believed was inadequate because of … [Read more...]