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May 17 2018

moneymetals

Turkish Gold Imports Triple As The Central Bank Diversifies Out Of Dollars

Turkish gold imports surged due to a sharp increase in investment demand as well as renewed Central bank purchases. While the Chinese and Russian governments have been adding gold to their official reserves over the past several years, Turkey added 86 metric tons to its official holdings in the last seven months of 2017.

According to the 2018 World Gold Survey, Turkish official gold holdings reached a new record high of 565 metric tons (mt) last year as the government decided to replace a significant amount of its Dollar reserves with gold. And, this continued even in the first quarter of 2018. Information from the World Gold Council’s Demand Trend reported that Turkey added another 30 mt of gold to its official reserves in Q1 2018.

If we look at the chart below, we can see just how much gold Turkey imported in 2017 versus 2016:

Turkish gold imports 2016 vs 2017

Turkish gold imports more than tripled from 106 mt in 2016 to 361 mt in 2017. Again, the large increase in Turkish gold imports was due to a 60% increase in investment demand and the 86 mt purchase by the Central bank. With the addition of the 30 mt of Central bank gold purchases in Q1 2018, official Turkish holdings are now nearly 600 mt.


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February 23 2018

moneymetals

5 Big Drivers of Higher Inflation Rates Ahead

Investors got lulled into a state of inflation complacency. Persistently low official inflation rates in recent years depressed bond yields along with risk premiums on all financial assets.

That’s changing in 2018. Five drivers of higher inflation rates are now starting to kick in.

Inflation Driver #1: Rising CPI

The Consumer Price Index (CPI) is a notoriously flawed measure of inflation. It tends to understate real-world price increases. Nevertheless, CPI is the most widely followed measure of inflation. When it moves up, so do inflation expectations by investors.

On February 13th, the Labor Department released stronger than expected CPI numbers. Prices rose a robust 0.5% in January, with headline CPI coming in at 2.1% annualized (against expectations of 1.9%).

In response to the inflationary tailwinds, precious metals and natural resource stocks rallied strongly, while the struggling U.S. bond market took another hit.

Inflation Driver #2: Rising Interest Rates

interest rates

Since peaking in mid-2016, the bond market has been stair-stepping lower (meaning yields are moving higher). In February, key technical levels were breached as 30-year Treasury yields surged above 3%. Some analysts are now calling a new secular rise in interest rates to be underway after more than three decades of generally falling rates.

The last big surge in interest rates started in the mid 1970s and coincided with relentless “stagflation” and soaring precious metals prices. It wasn’t until interest rates hit double digit levels in the early 1980s that inflation was finally quelled and gold and silver markets tamed.

​Continue to the full article (source)

September 11 2017

moneymetals

September 06 2017

moneymetals
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