SNB & CHF

ABN Amro, Natixis and Wells Fargo have issued bearish calls on gold. Natixis even expects three Fed rate hikes next year.  Pater Tanebrarum discusses these opinions critically.Since gold is correlated to CHF, this is a bearish for the Swiss Franc, too. One additional points speaks against a rate hike. The U.S. capacity utilization that is 75% compared to 90% in 1967. So Far a Normal Correction In last week’s update...

Summary: Bank of Canada meets Wed. Look for a dovish hold. Foreigners continue to buy Canadian bonds and stocks. The EU-Canadian free-trade deal is facing challenges, with the most pressing one coming from Belgium. The Bank of Canada meets Wednesday. Last month officials acknowledged that growth could be somewhat lower than previously anticipated. Those fears have likely materialized, and the central bank...

See the introduction and the video for the terms gold basis, co-basis, backwardation and contango. Fundamental Developments – Scarcity of Precious Metals Increases Slightly Not much price action at the metals tables in the casino. Gold -$7, and silver -$0.10. Gold to silver ratio unchanged. This will be a brief report, due to the rigors of travel this week. Gold and silver prices Read on for the only true picture...

Stock Markets EM FX gained a little traction on Friday, but capped a week of steady losses. As the US election and FOMC meeting next month get closer, we believe markets and risk appetite will remain volatile. So far, September data from the US does not suggest any urgency to hike in November, and so we continue to believe that December is most likely for another hike. Looking at individual countries, South Africa...

So Far a Normal Correction In last week’s update on the gold sector, we mentioned that there was a lot of negative sentiment detectable on an anecdotal basis. From a positioning perspective only the commitments of traders still appeared a bit stretched though, while from a technical perspective we felt that a pullback to the 200-day moving average in both gold and gold stocks shouldn’t be regarded as anything but a...

United States Of the forces driving prices in the week ahead, events appear more important than economic reports. There are four such events that investors must navigate. The Bank of Canada and the European Central Bank meet.  The UK High Court will deliver its ruling on the role of Parliament in Brexit.  The rating agency DBRS updates its credit rating for Portugal. The Bank of Canada is not going to change interest...

While subtle, the general public loss of faith in central banking has been obvious to anyone who has simply kept their eyes open: it started in Japan where in February hardware stores were reported that consumers were hoarding cash, as confirmed by the spike in demand for safes, “a place where the interest rate on cash is always zero, no matter what the central bank does.” Then, as we reported just over a week ago,...

Summary Fitch upgraded Taiwan by a notch. Thailand has a new king. South Africa’s Finance Minister Gordhan has been summoned to appear in court to face charges. Brazil’s Congress voted to approve a constitutional amendment to freeze government spending in real terms for at least the next 10 years. Brazil’s Petrobras cut fuel prices and introduced a new pricing mechanism. Stock Markets In the EM equity space...

One year ago, when it was still widely accepted conventional wisdom that NIRP would “work” to draw out money from savers who are loathe to collect nothing (or in some cases negative interest) from keeping their deposits at the bank, and would proceed to spend their savings, either boosting the stock market or the economy, we showed research from Bank of America demonstrating that far from promoting dis-saving, those...

Lurid Media Coverage In recent months, more and more of our clients and friends from overseas are asking us whether it is safe to travel to Europe. These fears are understandable, given the media coverage of the tragic events that occurred this year. The press painted a sinister and truly graphic picture of Europe as a war zone, as a target of global terrorism. The attacks in Brussels, the horrors we saw in Nice on...