April 2023 Market Roundup

Precious Metal Prices 

March was a positive month for precious metals, with silver outperforming gold with a 13% increase, whilst gold rose by nearly 8%. April has also seen an optimistic start, with both metals increasing in price but silver continuing to outpace gold with a jump of more than 4%. The demand for precious metals has been fuelled by various factors, including falling interest rate expectations, a weakening US dollar, some safe-haven demand and robust physical demand from China.  

Additionally, there has been a spike in demand for gold following the collapse of Silicon Valley Bank and the Federal Deposit Insurance Corporation’s closure of Signature Bank. These events raised concerns over the confidence in the banking system, causing investors to seek out the conventional security of gold. There was also speculation that the Fed could pause its rate hike schedule, as well as the increased risk of a US recession – both of which could prove positive for gold. As such, investors are eagerly anticipating looser monetary policy in the United States, whilst upcoming economic data from China and the US could impact commodities such as gold, silver and even copper. 

Barclays Dismisses Fears of a Wider Banking Crisis 

The Q2 2023 research update from Barclays addressed the recent banking troubles in the US and Europe and suggested that it should not indicate the start of a serious financial crisis. The group commented that, whilst there may be some lasting effects such as a contraction in credit and higher funding costs for banks, this won't be enough to spark a rate-cutting cycle in 2023. 

Barclays went on to suggest that banks everywhere will probably have to raise deposit rates, pushing up their cost of funding and translating into higher rates for lending. However, the group does not expect the Federal Reserve and the European Central Bank to cut interest rates aggressively in response to the current banking troubles, as both central banks have been trying to slow their economies down. Furthermore, it was expected that annualised core inflation in both the US and the euro area will be near three percent in the fourth quarter, which is still far enough from targets to make rate cuts unlikely this year. 

Indian Gold Imports Decline 

India's gold imports fell by about 30% to $31.8bn between last April and February 2023, mainly due to high customs duty and global economic uncertainties, according to data from the commerce ministry. However, silver imports increased by 66% to $5.3bn during the same period. Despite the decrease in gold imports, India's trade deficit – the difference between imports and exports – has not decreased. The merchandise trade deficit for April-February 2022-23 was estimated at $247.52bn compared to $172.53bn in the same period the previous year, with experts attributing the decrease in gold imports to high import duty and global economic uncertainties.

Central Bank Purchases Remain Strong 

According to the latest Central Bank Insights report from the World Gold Council, the momentum of central bank gold buying remained strong in February. Gold reserves globally rose by 52t during the month, marking the eleventh consecutive month of net purchases following January's 74t. This trend has remained on an upward trajectory since June 2022, based on the 12-month moving average. On a year-to-date basis, central banks have reported net purchases of 125t – the strongest start to a year since at least 2010, when central banks began to buy on an annual basis. 

In February, the Central Bank of Russia reported its gold reserves for the first time in over a year, with 2,330t of gold holdings at the end of the month. This accounted for 24% of its international reserves. The People’s Bank of China and the Central Bank of Türkiye also reported growth in their gold reserves, with China's reserves rising for the fourth consecutive month and Türkiye continuing its 15-month buying spree. 

Promising Results for Bug-Battling Gold!   

Researchers from the Barcelona Institute for Global Health have found promising results in using gold compounds to fight multi drug-resistant bacteria. These so-called ‘metallo-antibiotics’ – compounds with a gold ion at their core – may have the potential to kill bacteria and prevent its adaptation to form resistance. The gold complexes were tested against bugs including MRSA and bacterial pneumonia, with high efficacy against MRSA in 16 of the 19 compounds. With research on other types of gold metallo-antibiotics also showing promising results, the development of this kind of antibiotic would be relatively inexpensive and straightforward. 

King Charles III Presented With New Coin Collection from The Royal Mint 

His Majesty King Charles III appeared delighted when he was presented with coins from our new Coronation commemorative range last week.  

The Royal Mint Chief Executive Anne Jessopp and Collector Services Director Rebecca Morgan were invited to Windsor Castle to present the collection to The King. The coins in the Coronation Collection, designed to commemorate the coronation of His Majesty at Westminster Abbey on 6 May, feature a design depicting The King wearing the Tudor Crown, which was personally selected by His Majesty following in the tradition of his predecessors. 

The range includes a £5 coin with a design by Timothy Noad showing the coronation regalia – including the St Edward’s Crown – and a 50p coin featuring a drawing of the Abbey by The Royal Mint’s resident designer, Natasha Jenkins. There are also number of ounce coins that are available in several editions and sizes, each featuring the crowned portrait of The King on the obverse and an intricate design by John Bergdahl on the reverse. 

Anne Jessopp said: “It was such a privilege, with Rebecca Morgan, to have the opportunity to meet His Majesty. We were able to share with him the new collection of coins that The Royal Mint has struck to commemorate his coronation. I am so proud of the work the whole team at The Royal Mint has done in producing these beautiful coins to mark such an historic event.”