Market Update

Dear reader, welcome to the latest GoldRepublic newsletter! In just five minutes, we will fully inform you of current precious metal prices and the most relevant news that affects your investment in precious metals. Don't miss out on these valuable insights!

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1. Calm market response to the UK budget

The British budget of 26 November went without major shocks. Chancellor of the Exchequer Rachel Reeves announced £26 billion in tax increases. The markets reacted positively because no major surprises came out: yields on British government bonds fell, the pound rose and stocks picked up.

The £22 billion fiscal buffer was a plus and was deemed “wise” by the Institute for Fiscal Studies. However, there is tension in the timing: spending comes soon, tax increases later. And: With an expected tax burden of 38% of GDP, the UK is climbing to its highest level since the Second World War.

In other words, stability in the short term. But in the longer term, the question remains whether this budget does anything to the United Kingdom's weak growth prospects.

2. US consumers engage

US retail sales rose by just 0.2% in September, after a firmer +0.6% in August. Excluding cars and fuel, only +0.1% remained. The buying impulse is weakening, especially among lower-income households.

More importantly, growth in nominal terms conceals a much leaner underlying picture. Since January 2022, retail sales have increased by 16.1%, but adjusted for inflation, the real increase is only 1.1%. The combination of price pressure and a slowing labor market makes consumers cautious.

At the same time, trust is under pressure. The leading Conference Board index fell the most in seven months in November. Expectations for the next six months reached their lowest point since April.

The concerns focus on the labor market. Job growth is concentrated in only two sectors: healthcare and hospitality. Unemployment is rising steadily and more rounds of layoffs have been announced. The share of consumers expecting to earn more in the next six months fell to the lowest level since February 2023.

3. Germany gets stuck

The German economy did not move in the third quarter. Exports and private consumption in particular weighed on growth. Government spending and investments still provided some support, partly thanks to defense spending and infrastructure projects.

Nevertheless, in the medium term, the picture is fragile. Structural problems such as bureaucracy, a shortage of professionals and high external taxes are hampering the recovery. An unexpected dip in business confidence is fueling fears that new government loans mainly fill gaps and will not provide additional growth.

4. Gold demand continues to rise - especially invisible

Officially, central banks are already buying record amounts of gold. But what's out of sight may be even more impressive. Behind the scenes, more and more countries are swapping foreign exchange reserves for geopolitically neutral assets.

According to some analysts, real gold demand takes place outside the spot market, out of statistics, and out of the sight of Western regulators. The result: a gold market that is tighter than the official figures suggest.

Remarkable: even Tether, the issuer of the largest stablecoin (USDT), chooses to add gold to its reserves instead of US government bonds. The underlying question: how strong is trust in fiat money as a reserve really?

5. House prices continue to rise - but less rapidly

In the Netherlands, the prices of existing homes for sale were 6.6% higher in October than one year earlier. The increase is now leveling off: compared to September, prices rose by 0.5%.

Since the low point in mid-2023, the trend has been up again, but the pace is slowing down. Compared to the peak in July 2022, houses are already 14.5% more expensive. The question is whether the combination of higher interest rates, limited supply and increased wages keeps the housing market stable — or leads to pressure again.