Home Paper gold: A looming crisis

GEAB 145

The monthly bulletin of LEAP (European Laboratory of Political Anticipation) - 15 May 2020

Paper gold: A looming crisis

Are the precious metal markets rushing to get ready for the biggest bull run in history? Recent actions by the London Bullion Market Association, the Chicago Mercantile Exchange and many international bullion banks could be pointing towards a perfect storm in the precious metals sphere – one that could see a final collapse of the price discovery through derivative contracts, and true physical prices soaring beyond the $3000 dollars an ounce foreseen by the Bank of America.[1]

Gold is back in demand as global markets falter

Spot gold prices outside America have been setting all-time highs since last autumn and the collapsing value of many currencies – particularly those dependent on oil to support their national budgets – will likely see the yellow metal resuming its historic role as a currency hedge. Here in Europe, stock markets have been in the doldrums for a number of years, despite the extension of the zero interest rate policy. Since December, spot prices have risen 17% (figure 1) despite all the market turmoil caused by the COVID-19 crisis. What’s more, they seem to be resilient in the face of all threats, biological and financial, even jumping back quickly after attempts by the big banks to dampen down the bull market.

Comments

To leave a comment sign up now
Contents

The next US presidential election, despite its relatively normal exterior, is already showing some new features. For example: 1/ It’s not the main point of interest on the planet; 2/ [...]

The last quantum leap in public health dates back to the 19th century. It was the result of the application of the principle of free medical care for all citizens. [...]

What if the decision of the German Federal Constitutional Court (Bundesverfassungsgericht - BVerfG) of 5 May was to become the first key component of a European political and democratic system, [...]

As has been repeated several times since the outbreak of this crisis, COVID-19 will act as a multi-level accelerator. If this ends up being true in just one sector, it [...]

Insurances - The end of the system as we knew it According to Lloyd's of London, the insurance industry will have to pay out $203 billion this year and professionals [...]

Related articles
GEAB
15 Sep 2024

The intolerable persistence of the EU’s economic and political crises

#crisis #economy #EU #euro #europe

The European Union is facing a series of economic and political crises that threaten to shatter its model. Between the rise of nationalism, economic weakness and the failure of monetary [...]

GEAB
15 Jun 2024

Investments, trends and recommendations (Jun)

#ECB #gold #investment #oil

Gold in equities We always write about gold as a metal resource to invest in. But gold stocks also include shares in mining groups. Their margins, which are far from [...]

GEAB
15 Jun 2024

2025-2029: The dollar takes over from a weakened euro

#dollar #economy #EU #euro #finance #world

The economic outlook for Western countries looks bleak, judging by a number of indicators. After the decision to cut interest rates slightly, and with the two leading countries in difficulty, [...]