Global Stocks, Bonds Fall Sharply - Gold Consolidates After Two Weeks Of Gains

By: GoldCore

Global stocks and bonds fell the most since the Brexit panic today as recently dormant volatility came back with a vengeance.  There are deepening concerns that global central banks’ ultra loose monetary policies have been ineffectual and may indeed be creating asset bubbles in stock, bond and indeed property markets internationally.

Source: Bloomberg

European stocks fell sharply with the Stoxx Europe 600 shed 1.8% by late morning and leading European indices down by roughly 2%, on course for their biggest losses since June.

In Asia,  Hong Kong’s Hang Seng Index fell 3.4% in its worst day since February. Stock markets in Shanghai, Japan and Australia all closed with losses of around 2%.

U.S. stock futures pointed to a 0.8% opening loss for the S&P 500 after on Friday, it saw its biggest daily drop since the U.K. referendum.

Bonds also came under selling pressure with the yield on German Bunds rising above zero to 0.04 percent, their highest since Britain’s Brexit vote in late June. The rise in lower-rated euro zone countries’ yields was even sharper.

“Super Mario’s” euro printing debt monetisation has artificially suppressed yields in recent years. The 10-year Portuguese yield is up 7bp to 3.23 per cent and Italian benchmarks are adding 4bp to 1.30 per cent.

Irish 10-year bonds yield climbed 3 basis points to just 0.52 percent despite Ireland still having a monumental debt burden and recent warnings by the central bank of Ireland that the nation is exposed to “international shocks.”

It smells like the start of a much over due correction in stock and bond markets. The question is whether it is just another correction, the start of bear market or worse, another crash.

Brent crude oil dropped 1.9% to $47.12 a barrel and base metal prices retreated, weighing on shares of energy and mining companies which were some of the largest losers on the FTSE.

Gold performed relatively well despite the rout in stock and bond markets, however silver fell 1.4%.

Gold was just $2.40 lower at $1326.40/oz and was consolidating after the gains of last week when gold rose 0.25% from $1324/oz to $1328.80/oz. Indeed, it was gold’s second consecutive weekly higher close which is bullish from a technical perspective. Markets being sentiment and momentum driven this could mean the recent correction is over as technical driven traders are likely to take signal from this and go long gold.

Bloomberg warned that a selloff in fixed income is showing signs of snowballing into a global market rout. This bodes well for gold in the coming months and underlines the importance of being diversified and having an allocation to physical gold.

Gold Prices (LBMA AM)

12 Sep: USD 1,327.50, GBP 1,000.80 & EUR 1,182.54 per ounce
09 Sep: USD 1,335.65, GBP 1,004.68 & EUR 1,184.86 per ounce
08 Sep: USD 1,348.00, GBP 1,009.11 & EUR 1,195.81 per ounce
07 Sep: USD 1,348.75, GBP 1,008.60 & EUR 1,199.85 per ounce
06 Sep: USD 1,330.05, GBP 997.94 & EUR 1,191.46 per ounce
05 Sep: USD 1,328.30, GBP 996.23 & EUR 1,189.49 per ounce
02 Sep: USD 1,311.50, GBP 987.95 & EUR 1,172.74 per ounce

Silver Prices (LBMA)

12 Sep: USD 18.72, GBP 14.11 & EUR 16.68 per ounce
09 Sep: USD 19.41, GBP 14.58 & EUR 17.23 per ounce
08 Sep: USD 19.93, GBP 14.90 & EUR 17.65 per ounce
07 Sep: USD 19.92, GBP 14.89 & EUR 17.71 per ounce
06 Sep: USD 19.60, GBP 14.70 & EUR 17.55 per ounce
05 Sep: USD 19.46, GBP 14.60 & EUR 17.43 per ounce
02 Sep: USD 18.75, GBP 14.15 & EUR 16.76 per ounce

This update can be found on the GoldCore blog here.

Mark O'Byrne

WINNERS MoneyMate and Investor Magazine Financial Analysts 2006

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: Past experience is not necessarily a guide to future performance. The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. GoldCore Limited, trading as GoldCore is a Multi-Agency Intermediary regulated by the Irish Financial Regulator.

GoldCore is committed to complying with the requirements of the Data Protection Act. This means that in the provision of our services, appropriate personal information is processed and kept securely. It also means that we will never sell your details to a third party. The information you provide will remain confidential and may be used for the provision of related services. Such information may be disclosed in confidence to agents or service providers, regulatory bodies and group companies. You have the right to ask for a copy of certain information held by us in our records in return for payment of a small fee. You also have the right to require us to correct any inaccuracies in your information. The details you are being asked to supply may be used to provide you with information about other products and services either from GoldCore or other group companies or to provide services which any member of the group has arranged for you with a third party. If you do not wish to receive such contact, please write to the Marketing Manager GoldCore, 63 Fitzwilliam Square, Dublin 2 marking the envelope 'data protection'

This update can be found on the GoldCore blog here.

Mark O'Byrne

WINNERS MoneyMate and Investor Magazine Financial Analysts 2006

Disclaimer: The information in this document has been obtained from sources, which we believe to be reliable. We cannot guarantee its accuracy or completeness. It does not constitute a solicitation for the purchase or sale of any investment. Any person acting on the information contained in this document does so at their own risk. Recommendations in this document may not be suitable for all investors. Individual circumstances should be considered before a decision to invest is taken. Investors should note the following: Past experience is not necessarily a guide to future performance. The value of investments may fall or rise against investors' interests. Income levels from investments may fluctuate. Changes in exchange rates may have an adverse effect on the value of, or income from, investments denominated in foreign currencies. GoldCore Limited, trading as GoldCore is a Multi-Agency Intermediary regulated by the Irish Financial Regulator.

GoldCore is committed to complying with the requirements of the Data Protection Act. This means that in the provision of our services, appropriate personal information is processed and kept securely. It also means that we will never sell your details to a third party. The information you provide will remain confidential and may be used for the provision of related services. Such information may be disclosed in confidence to agents or service providers, regulatory bodies and group companies. You have the right to ask for a copy of certain information held by us in our records in return for payment of a small fee. You also have the right to require us to correct any inaccuracies in your information. The details you are being asked to supply may be used to provide you with information about other products and services either from GoldCore or other group companies or to provide services which any member of the group has arranged for you with a third party. If you do not wish to receive such contact, please write to the Marketing Manager GoldCore, 63 Fitzwilliam Square, Dublin 2 marking the envelope 'data protection'

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