Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page >> News >> Story  Disclaimer 
Latest Headlines

Another Gold Spec Short Squeeze Pending
By: Craig Hemke

Golden Arrow Chairman’s Update
By: Golden Arrow Resources Corporation

Merk Research - U.S. Equity Markets
By: Merk Research

As Oil Plunges, Energy Junk Bonds Turn Dangerous — Again
By: John Rubino

$2.06 Crude Target Absurd but Useful
By: Rick Ackerman

Asian Metals Market Update: Nov 14 2018
By: Chintan Karnani, Insignia Consultants

Gold Seeker Closing Report: Gold and Silver Hold Steady While Oil Slumps 7%
By: Chris Mullen, Gold Seeker Report

Ira Epstein's Metals Video 11 13 2018
By: Ira Epstein

Market Tactics For A Golden Smile
By: Stewart Thomson

A surprise jump in investor and central bank gold demand
By: Michael J. Kosares


GoldSeek Web

Gold In GBP Up 43% YTD – “Massive Twin Deficits” To Impact UK Assets

 -- Published: Wednesday, 12 October 2016 | Print  | Disqus 

Gold in GBP has risen another 3.5% in the last 3 trading days as the British pound continues to be “pounded” on international markets. Gold in GBP terms is now 43% higher year to date and has risen from £716/oz on January 1st to £1024/oz today.

Sterling is now the worst performing major currency in 2016 and gold the best.


Gold in GBP (10 Years)

The pound has completed its worst four day performance since Brexit and the pound remains considerably weaker versus the dollar, euro and gold since the Conservative Party conference, when Theresa May promised to trigger article 50 within six months.

Heavy losses sent sterling down by another 2 per cent yesterday to below $1.21 against the dollar, while against the euro, the pound fell below €1.10.

The pound has bounced back a little today but market participants are increasingly alarmed at the political prospect of a severe rupture between the UK and EU. All the focus has been on the real risks posed by a “Hard Brexit” but another major risk is being greatly underestimated. There is also the significant risk posed by the very poor financial situation that the UK finds itself in – with its massive twin deficits.

HSBC’s respected currency analyst David Bloom warned in a note:

“the question we have asked hundreds of investors throughout the world is do you want to buy a currency that has massive twin deficits with an unknown political direction and for that risk you can get zero rates?”

UK gilts have come under selling pressure in recent days and the yield on the 10 year is now at 1.03%.

The UK current account and budget deficits combined are around 10% of UK GDP. The UK budget shortfall was 33.8 billion pounds ($44 billion) in the first five months of the 2016-17 fiscal year. The UK budget deficit for August alone was £10.5 billion, higher than economists forecast.

Kit Juckes at Societe Generale in London warns that the demise of the UK currency could soon start impacting a broader range of assets:

“Press comment is now shifting to embracing the positive effects of a weak Pound and in due course that’ll be true but any further weakness from here might simply reflect loss of confidence and be bad for UK assets (gilts, equities, house prices, you name it…) in general.

“The market’s very short, but if Sterling weakness starts to feed weakness across assets, we will have all the conditions for a classic overshoot to start.”

Currency analysts expect sterling to fall a lot further which underlines the value of owning gold, both against local currency depreciation and also the loss of value of UK assets denominated in sterling.

HSBC is forecasting GBP—USD at 1.20 by year end and 1.10 by end 2017, taking EUR–GBP to parity. Morgan Stanley is targeting 1.24 in USD and 0.92 for EUR—GBP “relatively soon.”

Sterling dived 10% against US dollar in seconds last Friday night but the trade was later cancelled. Despite the cancelling of the allegedly “rogue trade”, a “flash crash” of 6% was still registered.

With this hugely volatile and uncertain backdrop, allied to the uncertain global geo-political and economic outlook, we are confident that gold in GBP terms will reach new nominal highs over £1,200/oz in the coming months, from £1,024/oz today (see chart above). It remains an important diversification and hedge for UK investors, savers and pension owners.

Gold and Silver Bullion – News and Commentary

Political Risks Roil Currency Market, Pummeling U.K. Pound (Bloomberg)

Nikkei drops on weak Wall St; investors risk-averse as sterling off session high (Reuters)

Gold fix banks will have to reveal correspondence for antitrust lawsuit (Financial Post)

Gold steady on easing dollar; Fed minutes in focus (Reuters)

Gold prices gain slightly in Asia as Fed minutes eyed (

No Love For Gold (Forbes)

Now may be the right the time to invest in gold (CNBC)

Gold Fix – Scotiabank Ordered to Produce Internal documents (Market Slant)

Productivity, Microchips, and War (Mauldine Economics)

This Will Unfold Slowly… Until the Day it Doesn’t (Future Money Trends )

Gold Prices (LBMA AM)

12Oct: USD 1,255.70, GBP 1,024.53 & EUR 1,139.05 per ounce
11Oct: USD 1,256.40, GBP 1,021.58 & EUR 1,130.76 per ounce
10Oct: USD 1,262.10, GBP 1,016.62 & EUR 1,129.71 per ounce
07Oct: USD 1,255.00, GBP 1,012.91 & EUR 1,127.62 per ounce
06Oct: USD 1,265.50, GBP 994.30 & EUR 1,131.23 per ounce
05Oct: USD 1,274.00, GBP 1,001.11 & EUR 1,134.37 per ounce
04Oct: USD 1,309.15, GBP 1,026.90 & EUR 1,172.21 per ounce

Silver Prices (LBMA)

12Oct: USD 17.44, GBP 14.23 & EUR 15.83 per ounce
11Oct: USD 17.48, GBP 14.26 & EUR 15.78 per ounce
10Oct: USD 17.78, GBP 14.31 & EUR 15.92 per ounce
07Oct: USD 17.33, GBP 14.01 & EUR 15.55 per ounce
06Oct: USD 17.76, GBP 13.98 & EUR 15.88 per ounce
05Oct: USD 17.80, GBP 13.99 & EUR 15.86 per ounce
04Oct: USD 18.74, GBP 14.68 & EUR 16.78 per ounce


| Digg This Article
 -- Published: Wednesday, 12 October 2016 | E-Mail  | Print  | Source:

comments powered by Disqus


Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to >> Story

E-mail Page  | Print  | Disclaimer 

© 1995 - 2018 Supports

©, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer

The views contained here may not represent the views of, its affiliates or advertisers. makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of, is strictly prohibited. In no event shall or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.