Daily Brief – Gold and Silver

Gold and Silver

Due to the vertiginous moves in both these precious metals all markets are more than usually fixated on the price action at present. Yesterday, both steadied and clawed back some of the recent losses with Gold rising almost 6% and Silver 10% to USD 4921, and USD 86.70 respectively at the time of writing – we say that as the precious metals market remains febrile. While the US Dollar remains strong(er), it is difficult to see Gold and Silver regaining their highs again soon but both Barclays and Deutsche Bank continue to bang the buy drum with the case for silver underpinned by the ever-increasing demand for its industrial use and especially in the solar power industry.

EUR/USD 1.1829.

UK Interest Rates

Consensus, as we know, is not necessarily a sure-fire winner when it comes to predicting market moves, but at present the consensus is for 2 cuts of 25bps each in 2026 taking bank rate down to 3.25%. The reason for that caution is down to the still present inflation lurking in the UK economy. If that inflation risk were to recede then as one of the policy levers to stimulate economic activity and that still elusive growth, a more aggressive interest rate cutting could be foreseen and a case can be constructed for interest rates being cut more deeply to a range of 2.50% – 3.0%.

GBP/USD 1.3711.

Game Changers

An interesting chart of the Top 30 people who changed the world for ever appeared on the socials at the weekend. Nikola Tesla for electricity looks to be insufficiently recognized at Number 30 in comparison to Alexander Graham Bell for the telephone at Number 1. Charles Babbage at 9 for the computer, Guglielmo Marconi at 10 for radio, John Logie Baird at 11 for TV, Vint Cerf at 12 for the internet. Medical breakthroughs also featured with William Harvey at 3 for blood circulation, Edward Jenner at 8 for vaccination, Jonas Salk at 19 for polio vaccine, and Alexander Fleming at 21 for penicillin. Like all such tables it makes for thought provoking reading but as ever is subjective.

GBP/EUR 1.1585.

Teak Decks

Not a subject that we, together with most of our readers, will have had much cause to consider but Jeff Bezos, who we can reveal is not one of our regular readers as far as we know, took delivery of his USD 500 million Koru super yacht in 2023 which uses lots of teak both for its interiors and its decking. Apart from looking good and being a status symbol, teak is resistant to rot and salt damage and is harvested from old growth trees which grow almost exclusively in Myanmar. It is illegal to import that teak into the USA, UK, and EU as Myanmar is sanctioned due to its military dictatorship regime and its lack of regard for sustainability. Koru incidentally is the subject of an investigation in Germany as to whether its copious amounts of teak came from Myanmar or legally from somewhere else. Meanwhile, UK yacht builder Sunseeker which also uses teak for its decks is searching so far unsuccessfully for a suitable synthetic alternative.

EUR/JPY 185.05.

Think Twice

In these less than certain times a fitting number from Canadian chanteuse Celine Dion who started a 7-week run with it this day in 1995 and scooped an Ivor Novello award into the bargain.

Don’t think I can’t feel that there’s something wrong
You’ve been the sweetest part of my life for so long
I look in your eyes, there’s a distant light
And you and I know there’ll be a storm tonight
This is getting serious
Are you thinking ’bout you or us?
Don’t say what you’re about to say
Look back before you leave my life
Be sure before you close that door
Before you roll those dice
Baby, think twice
Oh, baby, think twice for the sake of our love, for the memory
For the fire and the faith that was you and me
Babe, I know it ain’t easy when your soul cries out for higher ground
‘Cause when you’re halfway up, you’re always halfway down
But, baby, this is serious (this is serious)
Are you thinking ’bout you or us?
Don’t say what you’re about to say
Look back before you leave my life
Be sure before you close that door
Before you roll those dice
Baby, think twice

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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