A Geopolitical Commentary

Gold has long been considered a crisis hedge and a store of value in the face of global volatility, market uncertainty, and economic distress. As we move toward year-end, a confluence of geopolitical factors has aligned to increase gold’s risk-off appeal creating an ideal buying opportunity for the world’s favorite safe haven.

Geopolitical Futures defines geopolitical risk as.

“… the potential political, economic, military, and social risks that can emerge from a nation’s involvement in international affairs. Typically, they emerge whenever there is a major shift in power, a conflict, or a crisis. These risks can have far-reaching implications for both the country itself and the global community at large. There are many factors that can contribute to geopolitical risks, such as a nation’s economic stability, its political relations with other countries, and its military strength.”

The Russia and Ukraine War

On February 24, 2022, Russia invaded Ukraine in a major escalation of Russia-Ukrainian War which started in 2014. Global aid to Ukraine has now reached a staggering $278 billion. As of the end of September, nearly $183 billion had been appropriated by the United States.[1] Meanwhile, the war has cost Russia about $211 billion[2] along with 200,000 casualties and half a million wounded.[3]

The war has also contributed to global instability and worldwide inflation by disrupting supply chains, damaging agriculture, and destroying infrastructure. According to the International Monetary Fund, the war has specifically undermined efforts to address extreme poverty, food insecurity and environmental degradation.[4]

The war has also resulted in an historic shift in the global energy markets.

“Any American around at the time will likely remember the 1973 oil embargo. That’s when Arab oil producers cut exports to the U.S. and other nations in retaliation for support of Israel during the Yom Kippur War. Gas stations ran dry. Prices skyrocketed. And the U.S. economy flattened. It also created a profound and permanent shift in energy markets as nations looked for new suppliers beyond the Middle East. Now, Russia’s invasion of Ukraine has created another major shift in energy.”[5]

This shift has injected extreme uncertainty into the energy market and increased price volatility. And according to Control Risks, a global risk consultancy, “greater disruption to both oil product and crude oil markets is credible if Ukraine further improves its drone capabilities and Russia fails to boost its air defences.”[6]

The Israel and Hamas Conflict

The U.S. has spent an estimated $23 billion on the Israel-Hamas conflict which started on October 7, 2023 after Hamas attacked Israel killing some 1200 Israelis and taking hostages. $17.9 billion has been to support Israeli military operations.[7] Israel has spent over $26 billion to fund the war against the terrorist group.[8] The cost of the war has caused Israel’s economic output to plummet 5.6%, the worst of any of the 38 countries in the Organization for Economic Cooperation and Development.[9]

The Associated Press reports the following:

Israel-Hamas War Statistics

Internationally, the war has resulted in economic disruption, political realignment, new military vulnerabilities and a host of strategic challenges for the region reminiscent of the painful challenges of the past with Iraq and Afghanistan.[11]

And according to the Congressional Research service, the humanitarian toll has been simply staggering:

“About 90% of Gaza’s some 2.1 million residents have been displaced, with most facing unsanitary, overcrowded conditions alongside acute shortages of food, water, medical care, and other essential supplies and services. Obstacles to transporting aid through crossings and Israeli checkpoints and then safely delivering it have contributed to high levels of food insecurity.”

South Korean Martial Law

On December 3, 2024, the president of South Korea, Yoon Suk Yeol, declared martial law citing a threat from “anti-state” forces. It was the first time martial law had been declared in the East Asian country in over 40 years when a coup was carried out after the assassination of President Park Chung-hee back in 1979.[12]

The move plunged the nation of almost 52 million people into a national crisis. The martial law declaration by President Yoon was met with fierce backlash, condemnation and calls for reversal. Yoon did reverse the edict after just six-hours but then faced immediate calls for impeachment. While the vote for his removal from office failed, South Korean authorities have opened an investigation and are weighing possible insurrection charges against Yoon. According to CNN World, the president’s future is precarious at best

“While Yoon survived an impeachment vote in an opposition-led parliament on Saturday, his political survival now hangs in tatters. The travel ban on the country’s embattled leader was confirmed by the Corruption Investigation Office on Monday. His party previously said they will seek Yoon’s resignation and urged the president to be suspended from duties to protect the country from ‘grave danger.’”

The crisis has caused stocks on the Kospi (The Korea Composite Stock Price Index) and the South Korean won to collapse to levels not seen since 2009. As officials in Seoul are working frantically to prevent a market meltdown, the country is confronting deep political uncertainty and a period of prolonged volatility.

South Korea’s sudden instability threaten global tech supply chains, particularly for critical technology exports.

“As a major producer of memory chips, displays, and other critical tech components, South Korea plays an essential role in global supply chains for products ranging from smartphones to data centers …  South Korea’s semiconductor ecosystem, driven by industry leaders like Samsung and SK Hynix, is a cornerstone of global technology supply chains. Its dominance in critical areas like memory chips makes it indispensable to industries worldwide.”[13]

The Toppling of the Syrian Government

After ruling Syria for 50 years, the Assad regime was toppled on December 8, 2024. After just two weeks of fighting, rebels converged on Damascus and seized control of the capital virtually unopposed — as Syrian leader Bashar al-Assad fled to Moscow. 

The Assad Regime Ended on December 8, 2024

“Three decades after his rise to prominence and almost a quarter century of rule, Bashar is gone and so is the Assad dynasty. Almost incomprehensively swept away over a two-week period during which the Islamist rebel group Ha’yat Tahrir al-Sham (HTS) and its partner, the Turkish-backed Syrian National Army (SNA), swept out of Idlib province to seize the country from Bashar who barely managed to put up a fight after his Russian and Iranian allies abandoned him.”[14]

But the sudden, collapse of the Assad regime raises fears of a power vacuum in Syria and the possibility that the country could fall into the hands of terror groups. Indeed, Abu Mohammed al-Golani, the leader of the largest of the rebel factions is a former al-Qaeda commander.

According to The Hill:

“al-Golani is promoting himself as a pragmatic, political leader and extending assurances for Syria’s multiethnic and religious populations. These promises run in direct contrast to the violence and human rights abuses carried out by the Islamist groups he aligned with in the past, such as ISIS and al Qaeda.”[15]

The collapse of the Syrian government has thrust the Middle East into even greater uncertainty. While Bashar al-Assad was a notoriously brutal dictator, the rapid collapse of his regime has left little time to for the country to chart a path forward. Syria’s economy contracted by 85% during its civil war, (which started back in March of 2011) and most of the country’s infrastructure has been destroyed. Inflation in Syria is in the triple digits and their economic recovery will require significant and ongoing support from the rest of the world.[16]

With war still raging in Europe, ongoing conflicts in the Middle East, and a new leadership crisis in South Korea and Syria — the world order seems to be fraying before our very eyes.

Gold is a Global Crisis Hedge

Gold thrives in a chaotic world as prices have historically increased during times of pronounced global uncertainty. As the world economy becomes increasingly more fragile, physical gold will become increasingly more attractive and look for prices to rise on unprecedented safe haven demand.

Thor Metals Group, was voted the “Best Overall Gold IRA Company” of 2024. For more information on acquiring gold or any other investment grade metal, call 1-844-944-THOR to speak to a precious metals expert.

[1] https://www.ukraineoversight.gov/Funding/

[2] https://www.defensenews.com/pentagon/2024/02/16/ukraine-war-has-cost-russia-up-to-211-billion-pentagon-says/

[3] https://www.economist.com/briefing/2024/11/28/the-war-in-ukraine-is-straining-russias-economy-and-society

[4] https://www.imf.org/en/Publications/fandd/issues/2022/03/the-long-lasting-economic-shock-of-war

[5] https://www.npr.org/2023/02/28/1160157753/how-russias-war-in-ukraine-is-changing-the-worlds-oil-markets

[6] https://www.controlrisks.com/our-thinking/insights/ukraine-war-remains-potential-disruption-to-energy-markets

[7] https://watson.brown.edu/costsofwar/papers/2024/USspendingIsrael

[8] https://www.timesofisrael.com/a-year-of-war-saps-israels-borrowing-strength-while-costs-balloon/

[9] https://apnews.com/article/israel-hamas-hezbollah-war-cost-military-spending-32a53a86d946418022ca636539a83f4f

[10] https://apnews.com/article/israel-palestinians-hamas-war-anniversary-statistics-e61765035c725b3c8d4840e2bab565cd

[11] https://www.wilsoncenter.org/article/five-global-dangers-gaza-war

[12] https://www.csis.org/analysis/yoon-declares-martial-law-south-korea

[13] https://www.cio.com/article/3617847/south-koreas-political-unrest-threatens-the-stability-of-global-tech-supply-chains.html

[14] https://www.cfr.org/expert-brief/after-fall-assad-dynasty-syrias-risky-new-moment

[15] https://thehill.com/policy/international/5030921-who-is-abu-mohammed-al-golani-leader-syrian-rebels-who-toppled-assad/

[16] https://www.dw.com/en/syria-after-assad-whats-next-for-the-devastated-economy/a-71003751

Gold rose after China’s central bank added bullion to its reserves for the first time in seven months, and the collapse of Syria’s ruling dynasty further destabilized the Middle East.

Bullion climbed as much as 1%, after the People’s Bank of China said Saturday it bought 160,000 fine troy ounces last month. That was the first addition since April, which was the end of an 18-month run of purchases that had helped underpin prices.

The resumption of buying shows the PBOC is still keen to diversify its reserves and guard against currency depreciation, even with bullion near record high levels. Still, the volume it bought — about five tons — was relatively small compared with monthly additions earlier this year.

Market watchers also tend to be skeptical about the accuracy of declared Chinese central bank gold purchases.

“I take the Chinese six-month ‘pause’ with a pinch of salt,” said Rhona O’Connell, head of market analysis EMEA & Asia at StoneX Group Inc. “It is public knowledge that the PBOC has a history of reporting no purchases and then declaring a massive quantum leap in recorded holdings.”

Traders were also monitoring developments in Syria, after President Bashar al-Assad fled as rebel troops captured the capital Damascus. US airstrikes hit dozens of Islamic State targets in the central part of the country on Sunday as President Joe Biden cautioned that Assad’s downfall could lead to a resurgence of Islamic extremism.

“The government’s collapse in Syria could see haven demand flowing in,” according to ANZ Group Holdings Ltd. “The latest November nonfarm payroll confirms that rebalancing continued in the US, which will continue to support the Fed’s easing bias.”

Markets are focusing on the US consumer and producer-price reports due later this week, which are expected to show little increase in inflation pressures. The figures are among the last key indicators before the Federal Reserve’s meeting next week — its final policy decision before Donald Trump takes office in January. Treasury yields have drifted down as traders boosted wagers on another rate cut — a scenario that tends to benefit gold as it does not pay interest.

Gold soared to an all-time high above $2,790 an ounce in October, supported by the Fed’s pivot to monetary easing, as well as increasing haven demand on heightened tensions in the Middle East and Ukraine. Prices have eased since then, but remain 29% higher this year.

Spot gold rose 0.9% to $2,656.72 an ounce as of 12:19 p.m. in London, following a 0.4% decline last week. The Bloomberg Dollar Spot Index was steady, while silver, platinum and palladium all posted strong gains.

Read full article HERE.

Wealthy individuals want assets that protect from ‘market storms’ in 2025

While global stock markets have been on a pretty good run over the past decade, the billionaires have apparently got them beat.

That’s according to the 10th annual “Billionaire Ambitions Report” for 2024, recently published by UBS. At the top of that report was data showing that between 2015 and 2024, total billionaire wealth rose by 121% globally, from $6.3 trillion to $14 trillion. The bank compared that to the MSCI AC World Index, which posted a 73% gain in the same time frame. The S&P 500 incidentally, has gained about 77% in the same period.

Here’s their chart:

As for how those billionaires plan to hang onto that wealth, the UBS research finds those asset-class views shifting as U.S. and eurozone central banks lower interest rates.

Over the next year, 43% of billionaires said they would boost exposure to real estate and 42% to developed market equities. But they’re also looking to increase investments in “perceived havens from market storms,” with 40% signaling intentions to boost gold and precious metals exposure, and 31% cash levels.

Wealthy individuals remain keen on alternative investments, with 38% planning to boost direct private equity holdings, though 28% plan to raise private-equity funds/funds of funds holdings and 34% want to decrease them. Some 26% plan to boost infrastructure investments, and 35% private debt. But 27% of billionaires surveyed citing plans to decrease hedge-fund investments against 23% wanting to increase that segment.

Also nearly a third, or 32%, want to invest more in art and antiques, a notable boost from 11% last year.

Many billionaires see the best opportunities in North America, with 80% preferring that region over the next 12 months, and 68% over the next five years, as they cite technological innovations as well as energy security amid global instability. Just 11% see more opportunity in China.

North American billionaire wealth, incidentally jumped 52.7% to $3.8 trillion between 2015 and 2020, and another 58.5% between 2020 and 2024, led by industrials and tech billionaires, to $6.1 trillion, UBS said. The region also hosts the greatest percentage of the top 100 billionaires — 43%, versus 21% in Western Europe, 15% in Southeast Asia and 8% in China.

Tech billionaires wealth across the globe, not surprisingly, saw their wealth grow the fastest of any sector, from $788.9 billion in 2015 to $2.4 trillion in 2024, UBS said.

The overall number of billionaires grew from 1,757 to 2,682 between 2015 and 2024, with the peak hit in 2021 with 2,686 billionaires, but since that time growth has remained flat.

Finally, UBS notes that over 10 years, multigenerational billionaires have inherited a total of $1.3 trillion. “Naturally, this amount understates the total inheritance as many heirs have not themselves become billionaires,” they said.

“Looking forward, we calculate that billionaires aged 70 or more will transfer $6.3 trillion over the next 15 years, mainly to families but also chosen causes,” and that’s well over 2023’s estimate of $5.2 trillion over 20 – 30 years, due to asset price inflation and billionaires aging, the report said.

Read the full article HERE.

Federal Reserve Chair Jerome Powell warned Wednesday that the U.S. is on an “unsustainable” fiscal path and called for a course correction days after the national debt topped $36 trillion for the first time ever.

“The U.S. federal budget is on an unsustainable path. The debt is not at an unsustainable level, but the path is unsustainable, and we know that we have to change that,” Powell said during an interview at the New York Times DealBook Summit.

Powell, a lifelong Republican first appointed lead the central bank by President-elect Trump and reappointed by President Biden, has repeatedly warned the U.S. is on an unsustainable fiscal path. 

His latest comments come as Republicans ready for an intraparty battle over the potential fiscal impact of massive tax cuts in Congress, which is responsible for setting fiscal policy.

Speaker Mike Johnson (R-La.) and GOP leadership want to move quickly to craft a follow-up to the 2017 Tax Cuts and Jobs Act (TCJA) once Trump takes office and the GOP consolidates control in Washington.

Many provisions in Trump’s signature tax bill are set to expire in 2026, including individual tax rate cuts, a state and local tax (SALT) deduction cap and business tax breaks.

But a small coalition of budget hawks, which last year ousted former Speaker Kevin McCarthy (R-Calif.) over federal spending, will wield enormous power given a slim majority in the House. 

Their influence could derail plans to use budget reconciliation to fast-track a tax reform bill as Republicans grapple with how to deliver Trump’s tax cuts without further accelerating the national debt, which has alarmed lawmakers on both sides of the aisle.

“We don’t need to pay the debt down. We don’t need to balance the budget. We just need the economy to grow faster than the debt. And that’s not happening,” Powell said. 

“We’re running very large budget deficits at a time of full employment and strong growth, so we need to address that, and we’ve got to do it sooner or later — and sooner is better than later,” he added.

Read full article HERE.

Private-sector hiring continues to slow, but workers are finding pay increases for remaining in their current positions.

The U.S. economy saw softening private-sector job creation last month, adding to evidence of a slowing labor market heading into December that could boost the case for a final Federal Reserve rate cut.

Payroll-processing group ADP said Wednesday around 146,000 jobs were created in the private sector last month, a decrease from the downwardly revised tally of 188,000 in October.

Economists had expected ADP’s National Employment Report to show gains of around 166,000 as hiring slowed into the middle of the fourth quarter.

Investors are also likely to focus on wage and earnings details provided in the ADP release, which showed a year-on-year increase of 4.8% for so-called job stayers. That’s the first increase in more than two years for those workers who remained in their positions. 

Those seeking new roles saw pay gains of 7.2%, the lowest wage premium for changing jobs in more than three years.

“While overall growth for the month was healthy, industry performance was mixed,” said ADP’s chief economist, Nela Richardson. “Manufacturing was the weakest we’ve seen since spring. Financial services and leisure and hospitality were also soft.” 

Earlier this week, data from the Bureau of Labor Statistics showed that October job openings rose to around 7.7 million position while the so-called quits rate edged higher, to 2.1%. The report suggested workers are still finding higher-paying roles even amid a broader slowdown in hiring.

Stock futures added to gains in the wake of the ADP release, with the S&P 500 called 18 points higher and the Nasdaq set for a 150-point advance at the start of trading. The Dow is priced for a 165-point gain.

Benchmark 10-year Treasury note yields held steady at 4.271% following the release, while 2-year notes were last pegged at 4.2% following their biggest two-day pullback of the year.

The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.2% higher 106.58.

Read the full article HERE.

The threat of a tax on imports will be his all-purpose lever in foreign and even domestic policy.

Well, here we go. Donald Trump is still two months from returning to the White House, but he’s already wielding tariffs as an all-purpose bludgeon to achieve his political and foreign-policy goals. Markets will have to get used to it because this is going to be Mr. Trump’s second-term method, no matter the economic and strategic ructions.

The President-elect issued a broadside Monday on Truth Social vowing 25% tariffs against all goods from Mexico and Canada, and a new 10% tariff on imports from China. “This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!” he wrote about the Canada and Mexico levies.

The first political point to note is that Mr. Trump’s tariff justification isn’t economic or based on the traditional claims about cheating or “dumping” products in the U.S. That would typically require studies that find economic harm or a national-security threat.

The tariff here is in service of Trump’s campaign promise to reduce illegal migration and fentanyl smuggling. He vows to take unilateral executive action without any explicit legal rationale. Mr. Trump is threatening the countries, including two neighbors and allies, with economic harm if they don’t help him solve a domestic U.S. problem.

This is an extraordinary use of tariffs, but Mr. Trump is going to use this threat often in his second term. He tried a version of this in his first term to coerce Mexico into assisting him in better policing the border, and he liked the result. Mexico went along with the Remain in Mexico program that held migrants on the Mexican side of the Rio Grande while they awaited asylum rulings.

The hopeful interpretation now is that Mr. Trump is merely using tariffs again as a negotiating strategy to get these countries to help. If they act to reduce the flow of drugs and people, he’ll lift the tariff threat and claim political victory at home.

The problem is that this strategy isn’t cost free and there can be collateral damage. Start with the U.S. auto industry, which depends on cross-border trade to remain competitive. Vehicle components and raw materials move back and forth across North American borders as cars are assembled. A 25% tariff on each border pass would raise prices and cost American jobs. It’s no accident that shares of Ford Motor (-2.6%) and General Motors (-9%) fell sharply on Tuesday on the tariff news. Mr. Trump may not care about stock prices, but what about his new working-class coalition?

There is also the potential risk of retaliation. Mexican President Claudia Sheinbaum on Tuesday offered to talk to Mr. Trump about fentanyl and migration. But she also said she is prepared to respond with tariffs on U.S. exports. Mexico has shown in the past that it can be politically shrewd choosing the American goods and areas it targets with tariffs. Think swing Congressional districts and states.

“One tariff would be followed by another in response, and so on until we put at risk common businesses,” Ms. Sheinbaum said. She has her own economic nationalists to please.

There’s also the not-so-small matter that Mr. Trump’s tariffs, if imposed, would shatter the U.S.-Mexico-Canada Agreement that he negotiated and signed in his first term. The pact’s terms say it can’t be reviewed until 2026, and then the parties have another decade to negotiate new terms or abandon it.

In 2019 Mr. Trump said the USMCA would be “the best and most important trade deal ever made by the USA.” If he blows it up based on his own short-term political needs, he’ll send a message around the world that his—and America’s—treaty word can’t be trusted. U.S. trading partners and allies everywhere will get the message, and China will be courting them with promises of a more reliable export market. Using trade to punish allies is especially short-sighted if you want their help against Chinese mercantilism.

It’s also possible that Mr. Trump views tariffs not merely as a tool for ad hoc negotiation but as a lever to remake the entire global trading system. In that case he’ll try to build high tariff walls in an attempt to force U.S. and foreign companies to build nearly everything in America. The economic and political harm from that strategy is for another day, but investors can’t rule it out and members of Congress would be wise not to give him that power.

As we wrote during the campaign, tariffs were the main economic risk of his candidacy. Mr. Trump campaigned as the Tariff Man, and he aims to impose them early and often. Get ready for what could be a wild ride.

Read the full article HERE.

Key Takeaways

Retirement savings are crucial for a secure future, but Americans in their 50s face unprecedented challenges. They’ll need to overcome these issues to experience a comfortable retirement, but it’s important to understand the most significant burdens.

Here are five key roadblocks Americans in their 50s will need to overcome in order to build a secure future.

1. Shifts in retirement planning

One of the biggest challenges near-retirees face in the U.S. today is shortfalls in retirement savings accounts that result from getting caught in a transformational period.

Defined benefit pension plans were once the norm when it came to retirement savings. Workers did their jobs and employers offered a pension that provided a guaranteed lifetime income in retirement, with the amount paid dependent on things like salary and years of service.

In 1978, however, 401(k) deferred compensation plans were introduced, and a seismic shift occurred. Employers began moving toward defined contribution plans that required workers to decide how much and where to invest funds. This pension alternative became increasingly popular over time and is now standard practice in the private sector.

Americans in their 50s were among the first given the complex task of investing enough to support themselves in their later years. Many were unprepared to take on this obligation, potentially leading to shortfalls in retirement savings accounts.

To overcome this, workers must invest wisely. Those in their 50s should get as close as possible to maxing out their 401(k), including taking advantage of catch-up contributions available for those 50 and over. Build a budget around this goal and automate the process to maximize your chances of success.

2. Lifestyle inflation

Lifestyle inflation is another issue. This can occur when you increase your spending and living standards as your income increases. For example, while you might have once been happy with an older used car or a smaller home, you’re now eyeing that sprawling property or BMW after getting a big raise.

While there’s nothing inherently wrong with upgrading your standard of living slowly over time, it can become a problem if you aren’t living within your means or don’t prioritize saving for the future over consumption.

Unfortunately, many Americans may not be capable of exercising this level of discipline. Bank of America data shows that the proportion of people living paycheck-to-paycheck increases with age.

One way to help curb this problem is to bank at least a portion of your raises or bonuses. If you’re comfortable living your current lifestyle, any salary increases can go toward savings rather than spending more.

3. Student loan debt

While student loans are often considered a young person’s issue, that’s not necessarily the case. In fact, according to Pew Research Center, 14% of adults ages 40 to 49 still have student debt, as do 7% of people between 50 and 59, from their own education.

Some Americans in their 50s might also have student loans taken out on behalf of their kids. While this certainly may have a positive impact on a child’s future prospects, burdening yourself with student debt at this age can also place your retirement security at risk.

Those who still carry student debt may want to check out different repayment plans and possibly assistance programs offered through employers. Parents thinking about taking on debt for their kids need to review their finances closely to ensure it’s affordable, or explore alternative ways to secure funding.

4. High housing costs

Home prices, along with mortgage rates, remain elevated. The median sale price of a house sold in the U.S. in the third quarter of 2024 was $420,400, according to the Federal Reserve Bank of St. Louis. As of Nov. 27, 30-year fixed-rate mortgages averaged 6.81%, per Freddie Mac.

Furthermore, those who purchased a home when mortgage rates plummeted during the pandemic may find themselves trapped by their low-rate loan and unable to afford to move because of present-day home prices and borrowing costs.

Those struggling with housing expenses may want to carefully consider their options. Downsizing could make sense if you can use your home equity to buy a smaller home with cash and avoid today’s high rates. Looking into non-traditional homes, such as multi-generational living arrangements, could also be a viable solution for some families as many young people are also struggling to buy.

5. Supporting adult kids

Finally, supporting adult kids can be a significant roadblock to saving for retirement, and it’s a common one. In fact, a Savings.com study found 47% of parents with grown kids provide them with some kind of financial support (not including adult children with disabilities). On average, these parents fork over twice as much to support their kids as the average working parent contributed to their own retirement account. This can be a serious drain on resources.

Overcoming this obstacle can mean tough conversations between parents and children. Parents can still help by offering non-financial assistance, such as tips on budgeting, or both sides can work together on developing a roadmap to financial independence.

Fortunately, all of these common roadblocks can be overcome. Start planning today to help yourself retire in time and with the money you need.

Read the full story HERE.

Earlier this year, the Czech Republic’s central bank chief flew to London to have a look at a swelling stack of gold bars stored in the Bank of England’s concrete-encased vaults beneath Threadneedle Street.

Ales Michl’s mission to inspect the precious metal held for the Czech National Bank was part of the governor’s stated ambition to double the country’s stockpile to 100 metric tons in the next three years. It’s increased fivefold since he took office in 2022 with an aim to diversify the bank’s reserves.

“We need to reduce volatility,” Michl, who grew animated when queried on the subject, told Bloomberg Television earlier this month. “And for that, we need an asset with zero correlation to stocks, and that asset is gold.”

The Czech policymaker isn’t alone in accelerating bullion purchases. Peers from Warsaw to Belgrade are joining the gold rush as a way to diversify investments and bet on future price increases, making eastern Europe one of the biggest buyers of the metal and helping to drive the gold rally.

Central banks around the world are stocking their gold arsenals as a shield against external shocks such as prospective trade wars brought on by Donald Trump’s second presidency and geopolitical tensions in Ukraine and the Middle East. But eastern European monetary guardians have made a particular show of topping up their gold piles.

In addition to Michl’s foray to London, his counterpart in Warsaw has penned a movie script on the history of Polish gold. Serbian authorities hauled their stockpile held abroad home to keep it safer in Belgrade — and help cut storage costs.

Striving for a sense of security is a powerful motive in a region that’s been ravaged by Europe’s wars of the past — and that now finds itself next door to the continent’s deadliest conflict since World War II.

An exclusive club

Poland, which shares a border with Ukraine and is a staunch supporter of Kyiv’s war aims, was the largest buyer of gold globally in the second quarter, according to the World Gold Council’s latest data.

Poland’s central bank governor, Adam Glapinski, said gold and hard currency reserves are crucial to protecting the economy against catastrophic events. He increased bullion holdings to some 420 tons as of September, about half the stockpile of India or Japan.

“We are entering the exclusive club of the world’s biggest gold owners,” Glapinski gloated during a news conference last month, reinforcing his aim to raise gold’s share to 20% of all reserves.

The head of the National Bank of Poland lamented having no time to work on his draft script. A YouTube video produced by the central bank in February shows Glapinski basking in a vault lined with sealed boxes of six thousand gold bars, intoning that the stash “is the property of all Polish people.”

The Czechs are also prospective club members. The central bank in Prague boasts about $150 billion in foreign reserves — nearly half of gross domestic product — one of the world’s biggest by proportion.

Michl, whose diversification drive includes US stock purchases, has confronted some criticism for buying gold as it reached a market record this year. Monetary officials have pushed back by insisting that the long-term purchases are gradual, reducing the impact of price volatility.

With the geopolitical winds churning, gold purchases have been a good bet for monetary policymakers. Goldman Sachs Group Inc. listed the metal among top commodity trades for 2025, saying prices could extend gains during Trump’s presidency and reach $3,000 an ounce by December next year.

“Geopolitical fragmentation is favorable for gold, while gradual dollar weakening should be a further tailwind,” Bank J. Safra Sarasin said in a report from Nov. 10.

For eastern Europe’s leaders, gold is viewed as a safe harbor — and a political selling point — as they maintain often complex balancing acts between the West, Russia and China. The Hungarian central bank has boosted its gold stash by more than a 10th to 110 tons this year.

The country’s Prime Minister Viktor Orban has relished being the EU’s chief disruptor with his ties to the Kremlin and Trump.

The central bank in Budapest has also lauded the metal as a safe haven. But gold has a role in the country’s historic identity.

The Money Museum, located in one of the palaces owned by the Hungarian National Bank, features a steam locomotive fashioned from yellow bars. The sculpture, called “The Rumble,” depicts the central bank’s staff, which fled the Soviet military at the end of World War II on a train loaded with gold reserves to prevent it from falling into foreign hands.

The associations figure no less in Serbia, where President Aleksandar Vucic, who like Orban holds a firm grip on power, had the country’s stockpile held outside the country repatriated in 2021. This year, he promised to buy bullion with “every surplus of money” that’s left in state coffers “to be safe and secure in hard times.”

Serbia’s central bank governor, Jorgovanka Tabakovic, has overseen a tripling of gold reserves to 48 tons since taking office in 2012. The accumulation was handled closely with Vucic, who provided the “strategic thinking, knowledge of global geopolitical relations and information” to back the gold purchases, she said.

“Gold is gaining value and importance in times of global turbulences, especially in geopolitical conflicts and periods of high inflation,” Tabakovic said in emailed response to questions. “Unfortunately, in recent years we’ve seen both factors at play.”

Read the full article HERE.

Inflation edged higher in October as the Federal Reserve is looking for clues on how much it should lower interest rates, the Commerce Department reported Wednesday.

The personal consumption expenditures price index, a broad measure that the Fed prefers as its inflation gauge, increased 0.2% on the month and showed a 12-month inflation rate of 2.3%. Both were in line with the Dow Jones consensus forecast, though the annual rate was higher than the 2.1% level in September.

Excluding food and energy, core inflation showed even stronger readings, with the increase at 0.3% on a monthly basis and an annual reading of 2.8%. Both also met expectations. The annual rate was 0.1 percentage point above the prior month.

Services prices generated most of the inflation for the month, rising 0.4% while goods fell 0.1%. Food prices were little changed while energy was off 0.1%.

Fed policymakers target inflation at a 2% annual rate; PCE inflation has been above that level since March 2021 and peaked around 7.2% in June 2022, prompting the Fed to go an on aggressive rate-hiking campaign.

While the inflation rate has fallen significantly since the Fed started tightening, it remains a nettlesome problem for households and figured prominently into the presidential race. Despite its deceleration over the past two years, the cumulative impacts of inflation have hit consumers hard, particularly on the lower end of the wage scale.

Consumer spending was still solid in October, though it tailed off a bit from September. Current-dollar expenditures rose 0.4% on the month, as forecast, while personal income jumped 0.6%, well above the 0.3% estimate, the report showed.

On the inflation side, housing-related costs have continued to boost the numbers, despite expectations that the pace would cool as rents eased. Housing prices rose 0.4% in October.

Read the full article HERE.

President-elect Donald Trump vowed additional tariffs on Mexico, Canada and China, shaking markets with his first specific threats to the US’s top trading partners since his election win three weeks ago.

Trump said he would impose additional 10% tariffs on goods from China and 25% tariffs on all products from Mexico and Canada, in posts to his Truth Social network on Monday.

The US dollar staged a broad advance Tuesday, with the Mexican peso and the Canadian dollar among the worst performers. US Treasuries fell, with the yield on 10-year notes rising two basis points to 4.3%, partially reversing the reaction to Scott Bessent’s nomination last week as Treasury secretary, which weighed on the dollar and boosted US bonds amid optimism of a more measured approach to trade relations.

Trump’s market-moving threats were a stark reminder that he plans to wield tariff authority, or at least threaten to use it, as leverage against allies and adversaries alike. It’s another sign of his break from the international order where low tariffs are the goal and rules exist to discourage overreach of punitive trade actions.

In his Truth Social posts, Trump cast the new import taxes as necessary to clamp down on migrants and illegal drugs flowing across borders.

He accused China of failing to follow through on promises to institute the death penalty for traffickers of fentanyl, writing that “drugs are pouring into our Country, mostly through Mexico, at levels never seen before.”

“Until such time as they stop, we will be charging China an additional 10% Tariff, above any additional Tariffs, on all of their many products coming into the United States of America,” Trump said.

In another post, the incoming president also vowed to hit Mexico and Canada with a 25% tariff on “ALL products,” saying he would sign an executive order to that effect on his first day in office.

“As everyone is aware, thousands of people are pouring through Mexico and Canada, bringing Crime and Drugs at levels never seen before,” he said. “This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!”

Shortly after Trump’s post, Canadian Prime Minister Justin Trudeau contacted the president-elect and the two leaders had a phone call to discuss border security and trade, according to a government official with knowledge of the matter.

Immigration Response

Trudeau pointed out to Trump that the number of migrants who cross the Canadian border into the US is minuscule compared to those who cross from Mexico, said the official, who spoke on condition of anonymity.

Canada said it’s working closely with US law enforcement agencies every day to disrupt the “scourge of the fentanyl coming from China and other countries,” according to a statement by Deputy Prime Minister Chrystia Freeland and Public Safety Minister Dominic LeBlanc.

Liu Pengyu, spokesman for the Chinese embassy in the US, said economic and trade cooperation between both countries is mutually beneficial. “No one will win a trade war or a tariff war,” he wrote in an X post.

The Foreign Ministry in Beijing said in a statement Tuesday that China has provided support to America’s fight against fentanyl which is “US’s problem,” though it stopped short of mentioning any planned trade retaliation.

Representatives for the Mexican Foreign Affairs Ministry and Economy Ministry, as well as China’s Commerce Ministry, didn’t immediately respond to requests to comment. Spokespeople for Trump didn’t immediately answer a question about whether there would be exemptions from the duties.

Trump campaigned on pledges to implement sweeping tariffs, vowing to hike tariffs to 60% for all goods imported from China and as high as 20% for those brought in from the rest of the world — policies he says will help pressure companies to re-shore manufacturing jobs in the US and raise revenue for the federal government.

President Joe Biden has already hiked tariffs on a variety of Chinese imports this year, including semiconductors, solar cells and critical minerals, with rates ranging from 25% for batteries to 100% for electric vehicles. The move was the culmination of a review of Trump’s tariff increases in his first term — none of which were rolled back.

While it was unclear how Trump’s 10% tariff threat on China fit in with his previous statements calling for even higher duties, analysts saw this as an opening gambit aimed at the drug problem.

China’s Response

This “does not necessarily mean that Trump’s promised 60% tariffs on all Chinese imports are off the table,” said Neil Thomas, a fellow for Chinese politics at the Asia Society Policy Institute’s Center for China Analysis. “China will register its opposition and consider limited retaliation but is likely to respond cautiously at first to Trump’s threats, until it gets a better sense of the balance between confrontation and deal-making in his second term.”

While public health experts say fentanyl overdoses remain a major issue, provisional data released earlier this month by the Centers for Disease Control and Prevention showed a 14% drop in drug overdose deaths from June 2023 to June 2024. President Biden hailed US-China cooperation on counter-narcotics this month during a meeting with counterpart Xi Jinping in Peru.

Higher North American tariffs would upend the auto industry and other consumer sectors, including food, in which the three countries are highly integrated.

Mexico’s auto sector is particularly exposed to a trade conflict with the US, along with factories that export electronics, plastics and other manufactured goods to US consumers. Mexico became the US’s largest trading partner as China’s import share declined in recent years. The Mexican government estimates there’s now $800 billion annually in total trade between the nations.

‘Stir the Debate’

The Canadian and US auto industries are so intertwined, and work on such thin profit margins, that a 25% tariff is “not a real conversation,” said Flavio Volpe, president of the Automotive Parts Manufacturers’ Association, a Canadian industry group.

“The president-elect has done what he’s famous for, which is try to stir the debate. The only surprise is how early he’s done it,” Volpe said. “What we learned in the first term was he uses strong rhetoric, public rhetoric. But the negotiations are always tough, but reasonable — and I’m just telling everybody to be patient.”

A 25% tariff applied to all imports from Canada would put pressure on energy costs. Oil, gas and other energy products are Canada’s largest export to its southern neighbor; it’s by far the largest external supplier of crude to the US. Wilbur Ross, Trump’s former Commerce secretary, said earlier this month it would make no sense to place tariffs on Canadian energy.

The move on Mexico and Canada would reignite a trade feud that simmered across the continental bloc during Trump’s first term, where he forced a renegotiation of the North American Free Trade Agreement and imposed tariffs on certain sectors, including steel.

Currently, the re-branded trade pact, known as the United States-Mexico-Canada Agreement, allows for duty-free trade across a wide range of sectors. It’s not clear what recourse American importers, who would pay the duties, would have under the pact to head off any levy.

Beyond Bessent, Trump still has a number of top economic roles to fill in his administration. One of the chief architects of Trump’s tariff agenda, former United States Trade Representative Robert Lighthizer has yet to land a role in the second term.

Read full article HERE.