Daily Brief – Gold and Silver

Gold and Silver

As regular readers know we do not offer gold pricing but we do of course monitor the Gold price action as it is a key input into Equity, FX, and interest rate markets. Gold stands at USD 4,205 and Silver at USD 55.62. That gives a price ratio of 75. This week we were debating where Gold goes next and helpfully a Deutsche Bank forecast came out this week for 2026, predicting that it will average USD 4,450 for all of next year. So, limited upside in prospect after such a strong 2025 if that forecast is in fact correct. But what about those holding Gold as part of their asset portfolios? We prefer the suggestion of rather than divesting gold holdings to consider substituting them with Silver. The snag about that is that Silver has had a storming 2025 and is trading at its highest ever. The very long term historical Gold Silver ratio averages 60 as we have written previously but this year has been much higher spiking back in May at over 100. Indeed, the average for this year has been almost 80. So at 75, while historically high it would be wise to wait for an opportunity to switch out of Gold into Silver when Gold next has a run up and Silver lags or better still gives back some of that run up that it has recently enjoyed.

EUR/USD 1.1600.

Canary Wharf

As recently as 2024, pundits were claiming that CW had had its day and cited HSBC and Clifford Chance moving out as the start of a mass exodus. Fancifully, some even claimed that vast trading floors would become a thing of the past and would be turned into residential units. That was until sanity prevailed once the realisation that there would be limited demand for high rise apartments with no views due to the central areas having no natural light and no windows. All that has disappeared and HSBC has reversed its decision to leave, firms are demanding more office space and last week US investment bank JP Morgan announced a new HQ tower project designed by Foster+Partners which they estimate will bring a USD 13 billion boost into the local economy. BBVA the Spanish bank announced plans to establish its UK base in CW earlier this month and Morgan Stanley a pioneer of CW back in the early 1990’s has said it will extend its lease for another 20 years. So, a year on it is Clifford Chance that is looking the outlier rather than being a pathfinder.

GBP/USD 1.3235.

Resilience

Last month it was an internet outage that seized up markets, but on Friday there was a similar problem with a company called CyrusOne, that has multiple facilities around London and indeed worldwide. CyrusOne Chicago was however the culprit this time, when its mechanical cooling structure failed due to its cooling units breaking down. That meant that the Chicago Mercantile Exchange which is a fundamental cornerstone of global markets trading and pricing infrastructure failed and prices in Futures, Foreign Exchange, Government Bonds, Commodities, and Equities – so pretty much everything grinding to a halt. That’s tested out to the max what is known as Resilience in all banks i.e. their ability to continue to conduct business in an orderly fashion when systems, people, infrastructure, or liquidity fail. So a real life fire drill which fortunately occurred the day after Thanksgiving when markets were relatively quiet.

EUR/JPY 181.17.

UK Budget

Traditionally, there is a rash of reaction based analysis after a UK Budget and especially so following one that has been so controversial in its run up. By the time you read this, there will have been more reasoned and calmer reasoning as to what the implications are for the less immediate future following the Chancellor’s measures. On Friday, the OBR (them again) kicked off the second part of the debate by aiming that Rachel reeves was briefed 2 months prior to the Budget that the prognosis for the UK’s productivity and therefore for the economy was not nearly as bad as she was claiming. As such the Chancellor in addition to defending a poorly received Budget is also defending herself on the charge of misleading the market. For Rachel Reeves and the Prime Minister surviving to May suddenly looks even more ambitious.

EUR/GBP 0.8765.

You scumbag , you maggot

Those words may not be the most obvious festive phrase as we open the first door on our Advent calendars, but it has worked for the Pogues when they were voted the third best act for this song Fairytale of New York this day in 2008 jostling with Wham, Band Aid, Slade, Mariah Carey, and Bruce Springsteen. Now as queer as folk but this song when it comes to popular tunes but it is hard to escape it at this time of year…every year.

It was Christmas eve, babe
In the drunk tank
An old man said to me
Won’t see another one

And then he sang a song
The Rare Old Mountain Dew
I turned my face away
And dreamed about you

Got on a lucky one
Came in eighteen to one
But I got a feeling
This years for me and you

So happy Christmas
I love you baby
I can see a better time
When all our dreams come true

They got cars, big as bars
They got rivers of gold
But the wind blows right through you
It’s no place for the old

When I first took your hand
On a cold Christmas eve
Well, I promised you Broadway
Was waiting for you

I was handsome, you were pretty
Queen of New York city
When the band finished playing
They howled out for more

Sinatra was swinging
All the drunks, they were singing
And we kissed on a corner
Danced through the night

The boys of the NYPD choir
Still singing Galway Bay
And the bells are ringing out
For Christmas day

You’re a bum
You’re a punk
You’re an old slut on junk
Lying there almost dead on a drip in that bed
You scumbag, you maggot
You cheap lousy faggot
Happy Christmas your arse
I pray God it’s our last

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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