Gold and silver are the best performing assets in H1, 2016 and saw gains of 26% and 38% respectively. They were the best performing assets prior to Brexit and they are the best performing assets since Brexit. Since Brexit gold and silver are up 6% and 11% respectively.
Asset Performance, H1, 2016 (Finviz.com)
Gold and silver made gains due to continuing ultra loose monetary policies, diminished U.S. rate-increase expectations, worries about global economic growth, both U.S. and global geopolitical concerns and turmoil in markets in Q1. The UK decision to leave the EU has exacerbated these risks and highlighted them for complacent speculators and investors who seemed blissfully unaware of the growing geopolitical and macroeconomic risks
There is also the inconvenient truth that many European banks – French, Italian and Irish for example – remain woefully under capitalised and indeed are border line insolvent. It is not just banks in the unfortunate “PIIGS” that are vulnerable. A cursory glance of the share price of Germany’s Deutsche Bank and Switzerland’s Credit Suisse should give even the most complacent and Pollyannish tunnel vision bull pause for concern.
Both banks have massive derivative books and exposure and the bankruptcy of either one could lead the EU’s ‘Lehman moment’ and could contribute to the collapse of the EU and indeed the global banking system. To those who say that could not happen it is worth remembering – lest we forget – that we came very, very close to that just eight short years ago.
Gold and silver are reflecting the fact that we have a massive global financial bubble, especially in the bond market and in the U.S. stock market, which is based on ultra loose monetary policies and the creation of currency to artificially support and pump up to record highs global bond markets.
The global financial system is a complete mess and the drum beat of bank bail-ins and currency devaluations grows louder by the day.
6 / 11 dollar. stocks, bonds
Gold Prices (LBMA AM)
30 June: USD 1,317.00, EUR 1,183.59 & GBP 976.82 per ounce
29 June: USD 1,318.00, EUR 1,191.64 & GBP 984.36 per ounce
28 June: USD 1,312.00, EUR 1,185.79 & GBP 985.84 per ounce
27 June: USD 1,324.60, EUR 1,200.49 & GBP 996.36 per ounce
24 June: USD 1,313.85, EUR 1,181.28 & GBP 945.58 per ounce
23 June: USD 1,265.75, EUR 1,112.22 & GBP 850.96 per ounce
22 June: USD 1,265.00, EUR 1,122.31 & GBP 862.98 per ounce
Silver Prices (LBMA)
30 June: USD 18.36, EUR 16.48 & GBP 13.61 per ounce
29 June: USD 18.21, EUR 16.42 & GBP 13.55 per ounce
28 June: USD 17.57, EUR 15.84 & GBP 13.17 per ounce
27 June: USD 17.70, EUR 16.06 & GBP 13.40 per ounce
24 June: USD 18.04, EUR 16.32 & GBP 13.18 per ounce
23 June: USD 17.29, EUR 15.16 & GBP 11.61 per ounce
22 June: USD 17.20, EUR 15.23 & GBP 11.72 per ounce
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