Saud Central Bank Secretly Bought 160 Tonnes Of Gold In Switzerland - www.zerohedge.com.
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👉According to the Goldman Sachs nowcast of central bank and other institutional gold buying on the London OTC market, October saw central banks buy a whopping 64 tonnes in October (vs. pre-2022 average of 17 tonnes), with China once again the largest buyer adding 55 tonnes, which is striking since the official number reported by the PBOC was one-tenth that, or just 5 tonnes. In other words, China is secretly buying up ~10x more gold than it admits. 👉Commenting on the surge in purchases, the Goldman analyst writes that "surveys and history suggest that EM central banks buy gold as a hedge against financial and geopolitical shocks" and adds that "central bank purchases will remain elevated because fears about geopolitical shocks have structurally risen since the freezing of Russian reserves in 2022, and because relatively low gold shares in EM central banks reserves vs. DMs leaves room for growth." In fact, 81% of the central banks surveyed by the World Gold Council expect global central bank gold holdings to rise over the next 12 months, with none anticipating a decline. 🚨 As shown on the chart below, what is far more striking is the staggering (and growing) divergence between the modest amounts of gold purchases reported by the hashtag#PBOC and the far greater amount China has actually purchased on the London OTC market, in a clear attempt to mask its staggering demand for the precious metal, and be extension, its diversification away from the dollar... Source; www.zerohedge.com
Source chart: @topdowncharts
in the current context of weak inflation, upward pressures on the Swiss franc and worrying dynamics in neighboring European countries. The 50bp rate cut is half-a-surprise for financial markets, that were not fully convinced of the possibility of such large movement and were rather pricing a 25bp rate cut. swiss franc initially weakened 0.5% vs the Euro. But it is already back to 0.93. OUR TAKE (based on our Chief Economist Adrien Pichoud views) 👉 Swiss CPI inflation has slipped below 1% in the 4th quarter of 2024 (+0.7% in November) and it is expected to slow further in 2025. The SNB expects inflation to hover just above zero (+0.2%/+0.3%) for most of next year before picking up slightly as 2026 draws near. By averaging +0.3% in 2025, the inflation rate would be at the very bottom of the 0-to-2% range that the SNB targets. 👉 As the Swiss economy faces headwinds from the strength of the Swiss franc and the weakness of economic activity in Germany and most other European economies, monetary policy has no reason to be restrictive and had to be adjusted. After today’s rate cut, the monetary policy stance is about neutral (with a real short-term rate close to 0%). 👉 Looking ahead, more rate cuts are to be expected in 2025. We expect the CHF short-term rate to be lowered to 0.0% by June next year, with 25bp rate cuts at the March and June meetings. 👉 Will Switzerland move back to NEGATIVE RATES? This is not our scenario at this stage, even if it wasn’t ruled out by Mr Schlegel recently. Potential undue upward pressures on the CHF will then likely be addressed with interventions on the FX market and a possible expansion of the SNB’s balance sheet size. It would require a significant deterioration in global growth and inflation dynamics next year for the SNB to be pushed back into negative interest rate policies. Source chart: Bloomberg