Some General Thoughts On Gold And The FTSE

Now Further Good News – Gold And The FTSE 100

At the beginning of February, I headlined that I was expecting a run up to 8,000 for the FTSE 100, which was then 7,644, especially if it broke above the 7,750 level.

Well, that level was beaten six weeks later, following which a strong effort ensued to penetrate the 8,000 figure, which happened on Tuesday morning.

Now it is definitely heading higher still.

In that same article I repeated my keenness on Gold.

At that point it was trading at $2,059.60 an ounce, with my expectation of $2,135 being beaten ‘fairly soon’.

So, I was obviously pleased for all gold afficionados to note that futures are now being traded at the $2,280 level – now with calls generally that $2,400 is a very near prospect.

House Prices Are Rising

Some more good news.

It is now apparent that vendors are getting better prices for houses on the market.

After the falls in value over the last year or so, it is good news for property owners to see that asking prices are now only seeing approximately 3.5% discounts upon completions.

I have noticed, when driving around, that the reduction of For Sale signs in the latter part of last year, with a lot of properties actually being taken off the market, is now being replaced by Under Offer or even Sold signs.

Home sales are said to be some 9% higher in the first few months of this year.

That news will now encourage potential vendors to put their houses on the market, especially as Spring is now with us.

But I have to admit to some feelings of doubt when I see the offering of mortgages to new home buyers with just 1% deposit – that is scary.

However, of note was the piece of ’think tank’ research from the Resolution Foundation, whose findings were that houses in Britain were worse value for money than in any other advanced economy, except for Finland.

The Foundation’s Adam Corlett stated that Britain’s housing crisis has been decades in the making, with successive governments having failed to build enough new homes and modernise its existing stock, concluding that now really has to change.

Sorry Adam, it appears that no-one in government is listening.

Interest And Inflation Rates

Although the markets have been calling the Bank of England to lower interest rates for some months now, surely it makes sense to keep them up for a while as the UK economy continues to straighten out its economy.

I don’t believe the Rate of Inflation figures, especially as no account seems to have been taken of the massive ‘shrinkflation’ still underway, it is a figure that has been cobbled together without the real facts being taken into account.

So, when I see that ‘falls in inflation’ will combine with BoE rate cuts in a couple of months and help to create a Spring Bounce, I am sorry I really am not a believer.

Recovery?

I am by nature an optimist and bullish in attitude – so I am pleased when I read that in March activity in China’s manufacturing sector expanded for the first time in six months, meaning that recovery is now underway in the world’s second-largest economy, that surely has to be good news for other world economies, including that of the UK.

I feel even better when I see that, in the UK, the poll taken for the Institute of Directors economic confidence index is beginning to show the ‘green shoots of recovery’ – long may it last and here is hoping that it is faster in growing than apparent currently.

The British carmakers have reported rising production for the sixth month running, with manufacturing increasing by 14.6%, that is a good sign.

I note that commercial vehicles – vans, lorries, taxis, buses and coaches – saw production volumes up by almost double last month – taking that further perhaps could be a massive pointer of the recovery now underway – who knows?

NatWest Fizz

It is being whispered that the Government is going to throw a major effort behind this summer’s anticipated marketing of its almost 30% stake the NatWest banking group.

M&C Saatchi, the award-winning advertising agency, are said to be aiming at attracting share buyers in the 16-30 age groups, using a total blitz on the social media channels.

Could that mean that we are likely to see AI-created material goading youngsters to buy into the shares.

Seriously though, I am feeling wary about just how this mass of shares in the £23bn giant will be marketed.

Energy Hassles

We got rid of the UK’s coal mines, now we are letting the commercial interests of other countries pile in to recover oil and gas supplies from around the UK’s coasts.

Worse still, we are spending like mad upon wind, solar and hydro-electric output, which is failing to offset the fall in the more carbon-intensive fuels.

What is more, we imported 41.1% of the country’s energy last year, some 10% more than in 2022.

Norway supplies us with the most natural gas, while we rely upon the USA for liquefied natural gas, previously Qatar was our biggest source.

Did you know that the proportion of electricity generated by renewables accounted for 47.3% of the mix, while gas is the single largest energy source accounting for 34.3% of the country’s energy generation.