Gold & Platinum Shining In 2016!

Ladies and Gentlemen,

Gold has rallied almost 17% this year and most analysts are looking at the Metals markets heading higher, spear headed by the Yellow Metal.

So what has been the key driver of Gold this year? Well, Monetary Policy in US. If we look back at last year one of the reason Gold struggle to rally is because it was cautious about the rate hike.

This year, the drivers have changed. Looking at the Financial Market & Global Economy as a whole. After last months FED meeting we saw Gold getting a lift, upon the cautious dovish notes.  We also saw that China Gold imports were lower recently and heavy restocking, especially ahead of the New Year (Jan - heading into February).






 












So what is the cap then on the upside? Well, as Gold prices rally quickly the downside range can also be greater. Hence why if we saw a huge spike up to $1300 it could be bad for the market. However, if we see prices correcting at these levels (as well as the physical market adjusting) and the market coming into the right support - this could provide for a much more sustained move higher.

Another interesting market... Platinum. 

Platinum flirting with 1,000 per ounce, after a 5 year pressured market and that has not been enough to lift prices at all. The underlying stocks have also been quite high with supply growing also. However, 2016 looks like the year we will see XPTUSD start to base around the 1,000 per ounce mark and prices should be lifted from here.

There is also a strong fundamental reasoning for this sustained move higher. Firstly, South Africa (accounting for 80% of the World's Platinum) and their wage negotiations, which will be very significant. From this, we should see more producer discipline and cut backs in supply growth, this should lift in investor sentiment.   Most of the Rand volatility should also support this wage case.

Secondly, the Jewelry market - which was incredibly weak last year.. although the price elasticity has come back into play this year offering a greater floor for prices.

As always. Trade Smarter

Anish8FX@Atom8.com

The UK Budget 16 March 2016 12:30 GMT

UK Budget... What to expect? 

Scheduled for 12:30 GMT, this will be Chancellor George Osborne’s eighth budget. Having set himself a target of achieving a surplus by 2019-20 , sluggish growth since November could mean more spending cuts and tax rises. His statement comes with two months to go before the UK votes on its EU membership. The government is campaigning to remain in the EU, and the chancellor will be keen to avoid antagonizing either side in the debate with his announcements.

WHAT WE ALREADY KNOW

A fresh round of government spending cuts

Osborne warned over the weekend that a slowdown in global growth would lead to further fiscal tightening, saying he would use the Budget to slash 50p in every £100 the government spends by the end of the decade, or around £4bn, from the Treasury’s balance sheet.

More than £300m in funding for Crossrail 2 and HS3.

Osborne will use the Budget to commit to more than £300m in new infrastructure spending, including £80m to fund the development of plans for Crossrail 2 and £60m to draw up plans to introduce high-speed rail in the north. In a major move for London transport, the chancellor will also say for the first time that Crossrail 2 is a “priority scheme” and commit to introduce a Crossrail 2 Bill by the end of the parliament.

A green light for driverless cars on Britain’s motorways

The chancellor is due to announce the first trials of driverless cars on British motorways and vow to spend £15m creating a “Connected Corridor” from London to Dover to help driverless cars communicate wirelessly with existing infrastructure.

WHAT MIGHT HAPPEN

Another hike in the insurance premium tax (IPT)

The AA warned over the weekend that the chancellor is considering raising the basic rate of insurance premium tax (IPT) from 9.5 per cent to 12.5 per cent. Just last November, Osborne increased the basic rate of IPT from 6 to 9.5 per cent – meaning that the stealth tax on more than 50m motor, home, medical and pet insurance premiums could be set to double in less than six months.

The first increase in fuel duty in five years

Osborne froze fuel duty in 2011, and given persistently low oil prices and the large amount an increase in the tax could net for the Treasury – an extra 2p of duty would bring in about £1bn – many believe the chancellor may announce a rise in the Budget. But the move would prove unpopular, with backbencher MPs from multiple parties opposing any increase.

An income tax break for middle and higher earners

Osborne is reportedly looking at increasing the amount people have to earn before they start paying the higher 40p tax rate to £43,000, from the current threshold of £42,385. The chancellor could also slash the top rate of tax from 45p to 40p, which would benefit people earning more than £150,000 a year.

Higher taxes on alcohol, tobacco and other vices

Brewers are betting on another 1p to be taken off beer duty, but Osborne is said to be looking at increasing taxes on alcohol, as well as imposing a minimum tax on cigarettes.