News

30.11.2023 – Too high too fast. Gold and silver are about to crash, believes a precious metal bear. But perhaps he hasn’t been paying attention to China.

Let’s take a look at the gold price first. It has recently risen rapidly, as shown in the daily chart.

Source: Bernstein Bank GmbH

As loyal readers know, we also like to let the small and rather unknown players in the market have their say. Przemyslaw K. Radomski, for example, head of the investment boutique Sunshine Profits. He has just warned of several sell signals in gold and silver.

Signals in the greenback
Firstly, there is the strong stock market, which often correlates with the metal market. Then there is the weak dollar, which according to his chart analysis is on the verge of a turnaround: “We have a situation in the USD Index that is a screaming buy alert”. Here, the expert cited the overbought situation, visible in the RSI index, for example. His verdict: “Given the negative correlation between the USD Index and the precious metals sector, this very likely means that the tops in gold, silver, and mining stocks are either in or about to be in.” In fact, the Financial Times recently made a similar judgement: gold has reached a six-month high because the prospect of falling interest rates is weighing on the dollar.

Playground for small investors
Sunshine Profits also referred to silver: if the white metal pulls up sharply compared to gold – which has recently been the case – then it is time to buckle up and prepare for a price collapse. Here is also the daily chart.

Source: Bernstein Bank GmbH

According to Sunshine Profits: “The silver market is considerably smaller than the gold market and it’s more popular among individual investors (compared to the interest from institutions), which means that as investment public gets excited, it’s likely to push the silver market more than the gold market. And when does the investment public get particularly excited? That’s right – at the tops, or very close to them.” In fact, small investors like to jump on the silver bandwagon when gold takes off – because the yellow metal is too expensive for them. But also because silver has a number of industrial applications, for example in electronics or solar energy systems.

China in a buying frenzy
But isn’t the perma-bear forgetting something? China, for example. According to the “China Daily”, experts expect demand to continue, “as economic and geopolitical uncertainties may drive up investors’ purchases of safe-haven assets.” Our interpretation: The Middle Kingdom is known for its inflationary policy; in view of the crash in the property market, new government money is the order of the day, increasing the money supply.
Demand for gold bars and coins rose to 82 tonnes in the third quarter – an increase of 16 per cent year-on-year and the strongest sales since 2018. In the first nine months, sales were 26 per cent higher than in the same period last year.
Wang Lixin, head of the China section of the World Gold Council lobby group, told the newspaper that after the Covid lockdown, there is now pent-up demand for weddings – and for jewellery. According to “China Daily”, demand for gold and silver jewellery climbed by 12.2 per cent in the first three quarters. According to the jewellery association, this increase was almost twice as much as the rise in the retail sector as a whole. However, it is not only retail investors who are buying, but also the central bank. Since the beginning of the year, the central bank has increased its reserves by 181 tonnes to 2,192 tonnes of gold. Investment funds are also buying: ETF holdings rose by 9.5 tonnes to 57 tonnes in the third quarter.
We are therefore curious to see how things will continue with precious metals – and wish you successful trades and investments!

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The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7

27.11.2023 –  Something astonishing is happening with the Turkish lira: namely nothing. Although the Turkish central bank has now drastically increased interest rates, the currency continues to lose value unabated. An alarming indication of the total loss of confidence.

You rarely see that: No reaction to a rate hike, zero, nothing. Here is the daily chart of USDTRY. The distinctive central bank governor Hafize Gaye Erkan, who has been in office for six months, has shown backbone and economic expertise – after all, she is a trained banker with the addresses of First Republic Bank, which was taken over by JPMorgan, and Goldman Sachs on her CV. Last week, the governor pushed through an interest rate hike of a whopping 5 percentage points to 40 percent. This was the sixth rate hike in a row; when she took office, the interest rate was at 8.5 percent.

However, the new female wonder weapon has evidently already worn off: As recently as August, the currency market had reacted strongly when Erkan raised the interest rate far more than expected from 17.5 percent to 25 percent – forecasts had been for 20 percent. We are therefore curious to see how long it will last, because good is sometimes not good enough.

Inflation rate at 61 percent
The reason why the lira continues to plummet is the fact that inflation is still a good deal higher than the massive interest rate: Last month, inflation was a staggering 61.36 percent. Another problem is the central bank’s announcement that there will probably be no more interest rate hikes soon – the current level is close enough to that which is suitable to initiate a disinflationary course. Hmm…
Investors obviously see things differently: “Save yourself who can” is the motto of all those who still hold lira. Accordingly, play money is being exchanged for gold, dollars or euros. In addition to the loss of confidence in the retail market, we are seeing above all a massive flight of capital by investors.

Chauvinism on the Bosporus
The reasons are simple: President Recep Tayyip Erdoğan is pursuing a course that combines ultra-nationalism with Islamic fascism, which may please poorly integrated Turks in Neukölln or elsewhere in the European Union, but does not increase their chances of joining the EU. Turkey is de facto better suited to the Arab League, where the agitation against Israel is readily heard. Ditto in Iran or in China, which as always opportunistically sides with the over one billion Muslims in the Gaza war, but in the meantime continues to blithely eradicate the culture of the Uyghurs and tear down mosques. To which Ankara remains silent, just like the rest of the oh-so-moral Islamic world.
The important link to the European economic area is therefore missing. As a war profiteer, Turkey earns twice over because it supplies both Russia and Ukraine with weapons. However, the war in Syria and the civil war against the Kurds in its own country are costing a lot of money, which is why the central bank is busy printing digital money. The upshot of all this is that it doesn’t look like Turkey will become part of the Western world any time soon – on the contrary. We wonder when Turkey will be thrown out of NATO.
The price target for the lira therefore remains: zero. In other words: currency reform. Of course, only if the current policy continues. Always keep an eye on the real-time news: An interest rate shock with an unexpected increase of 20 percent between the regular meetings or a multiplication of the interest rate for overnight lending can lead to harsh swings as in August. Bernstein Bank wishes you successful trades and investments!

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The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7

24.11.2023 – Many investors are breathing a sigh of relief after the legal quake at Binance. However, some experts are warning Bitcoin disciples against too much euphoria – the market is by no means at its best after the settlement.

All-clear or not? Bitcoin has risen and has just formed an ascending triangle on the daily chart – in most cases, this is a bullish continuation formation. The price driver is the hope that index funds that invest in the spot market will be approved. The Binance case also seems to have brought a cleansing thunderstorm down on the market. Or has it?

Source: Bernstein Bank GmbH

We have borrowed the title for today’s analysis from the “Börsen-Zeitung”. It recently stated: “After the multi-billion dollar money laundering settlement between Binance and the US authorities, crypto enthusiasts are once again indulging in delusion.”

Criminal machinations

Many – including JPMorgan – believed that the resignation of CEO Changpeng Zhao and the fine of 4.3 billion dollars for money laundering and breaching sanctions was the best thing for the community. “But this is a dangerous simplification of the outlook for the crypto market,” the paper said. This is because the pressure from regulators will by no means disappear into thin air. If the decline of Binance gains momentum, this could have consequences for the entire segment.
As Binance had apparently done business with Russia, Iran and Hamas, only the most deluded crypto disciples would know how such serious criminal activities could create trust in the financial market, the “Börsen-Zeitung” concluded. And there’s more.

Campaign against the industry
The SEC has just taken on another heavyweight in the crypto market. On November 20, the SEC filed a lawsuit against Kraken with the federal court in San Francisco. According to Reuters, the allegation is that Kraken is not registered with the supervisory authority and is therefore operating illegally as a securities exchange. In addition, a decision in the US Congress on the regulation of the market is still pending – it is therefore unclear whether the SEC has jurisdiction at all. Kraken countered that the SEC had not yet issued any rules on what exactly registration should look like. And that brings us to the heart of the matter.
Because apparently SEC chief Gary Gensler is leading a crusade against the industry. Binance is a victory for him, even though the Commodity Futures Trading Commission played a leading role here. But there have also been defeats for the SEC – such as a ruling in July before the Southern District of New York that Ripple is not a security and therefore does not need to be regulated. And – more importantly – in October, Grayscale scored a triumph before the U.S. Court of Appeals for the District of Columbia Circuit – the financial manager wants to launch a spot index fund. Judge Neomi Jehangir Rao in Washington accused the SEC of arbitrary and capricious regulation: “arbitrary and capricious because the commission failed to explain its different treatment of similar products”. It was precisely this verdict that kick-started the recent bull market, as around a dozen spot ETFs are scurrying around.
Our conclusion: perhaps Gensler will become the Knight of the Sad Countenance and his obvious attempt to strangle the crypto market through overregulation will fail. Then he would be the real deluded one. If the industry is given fair and comprehensible guard rails, the path to the top is open for digital assets. But only as soon as the criminal black sheep have been weeded out. Whether long or short – Bernstein Bank wishes you successful trades and investments!

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The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7

22.11.2023 – The bulls are melting away like chocolate: the cocoa rally is unstoppable. The old reasons are also the new ones. We provide a brief update.

Strong rally: In New York, futures just reached a new 46-year high before profit-taking set in. Here is the daily chart. The reason for the rally: According to the financial website Barchart.com, the market is worried that current global production will not be enough to prevent a worldwide deficit.

Source: Bernstein Bank GmbH

In addition, the Intercontinental Exchange (ICE) reported an emptying of stocks: reserves in US ports are at their lowest level for two and a half years, according to the commodity exchange in Atlanta.

Problems in Africa
Fittingly, a report from the Ivory Coast: according to the report, the most important producer shipped around 415,000 tons from 1 October to 19 November – a whopping 29% down on the same period last year.
As previously reported here, farmers in Africa are plagued by black pod disease – the black rot was fanned by heavy rainfall. The fungus responsible not only reduces the harvest quantity, but also the quality. This is compounded by the swollen shoot virus, which is transmitted by aphids and leads to the death of the plants. The experts at Tropical Research Services assume that a fifth of the plants in Côte d’Ivoire are infected.
The second largest producer, Ghana, is plagued by similar concerns. Added to this is the fact that fertilizer is becoming scarce. The local regulatory authority had already warned in the summer that farmers would not be able to meet their promised harvest quotas. The 2022/23 harvest will probably be 683,000 tons, a 13-year low – around a quarter below estimates.

Speculative distortion?
However, bulls should be cautious, according to the website “Dairy Processing” – the data situation is completely unclear. Speculative funds are at least partly behind the bull market, which is not fully supported by the fundamentals. For example, an analyst at a major chocolate manufacturer suspects that smuggling to neighboring countries has contributed to the decline in the harvest in the Ivory Coast – which has actually only fallen by 10 percent. Neighboring countries paid the farmers more than the Ivory Coast. The global deficit for the year is probably only around 2 percent, which does not justify the bull run.
In addition, demand is slowly collapsing. For example, cocoa mills in the USA reported an 18 percent drop in processing in the third quarter to date. Halloween was included in this period. According to “Dairy Processing”, the decline in Europe was only 0.9 percent, but Asia reported a drop of 8 percent.
We are therefore curious to see whether the rally will continue – after all, we are approaching the Christmas season, when chocolate is traditionally eaten. Preferably together with a good whisky. With this in mind, Bernstein Bank wishes you successful trades and investments!

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The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7

20.11.2023 – Oil is rising again slightly, the price of American natural gas continues to fall. The determining factor at the moment is not the conflict in Gaza. It is simply supply and demand.

This is the mixed situation for crude oil: both OPEC and the International Energy Agency (IEA) have just raised the outlook for demand, pointing to China and robust economies in the West. On the other hand, traders pointed to rising oil inventories in the US, record-high production in America and the first decline in US retail demand.

Source: Bernstein Bank GmbH

Last Friday at least there was a counter-reaction in Brent, the four-hour chart above: the price rose by over 4 per cent in the meantime. But this was above all simply short covering – the bears are fed up for the time being. John Kilduff, an expert at asset manager Again Capital, told the Reuters news agency that there had been natural profit-taking.

What the bears are saying
Fundamentally, the market is swimming in oil. Andrew Lipow, head of the Texan management consultancy Lipow Oil Associates, told the news agency Bloomberg that the low prices are a sign “that the market is oversupplied at the moment”. The expert referred in particular to the expiring sanctions against Venezuela. Furthermore, OPEC+ will probably allow its production cuts to expire in the first quarter. Andrew Pile, an analyst at investment consultancy CIBC Wood Gundy, expressed a similar view: also in an interview with Bloomberg, he spoke of an oversupply and an expected slowdown in the US economy.

What the bulls say
However, Christyan Malek, Head of Energy Strategy at JPMorgan, warned that the market is underestimating the possibility of further OPEC+ production cuts. There could already be drastic changes at the next meeting on 26 November. In fact, the Financial Times also reported such an option. Anger at Israel is growing in the cartel: “an additional Opec+ cut of up to 1mn b/d could be on the table, one informed person said, describing the cartel as “galvanised” by the conflict.” So this looks very much like a punishment of the West.
It should be noted, however, that the Arab world and its radical left-wing supporters in the West should at some point accept that Jews have not allowed themselves to be slaughtered without defence for 75 years. As in these massacres: Granada 1066, Fez 1565, Benghazi 1758, Algiers 1815, Damascus 1840, Baghdad 1941, to name but a few. Submissive politicians in this country who kowtow to the raging mob should also abandon the naive idea that Israel or the West can do anything to make the hatred in the Arab world disappear.

Gas tanks full to bursting
Let’s turn briefly to natural gas. Here, too, we are currently seeing an oversupply, as shown in the daily chart of US gas.

Source: Bernstein Bank GmbH

Investing.com recently reported that tanks in the USA were already 6 per cent above normal levels as at 10 November. The London Stock Exchange Group added that the output of natural gas from the 48 producing states in the USA reached a new record of 107.2 billion cubic feet per day in November, following a new high of 104.2 billion in October.
The conclusion from all of this is that the energy market currently appears to be saturated. The remaining disruptive factor is politics. The question of all questions is this: Will Iran intervene in the Middle East conflict after all or not? So keep an eye on the real-time news – we wish you successful trades and investments!

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The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7

17.11.2023 – Some people like to suffer, it’s called masochism. Whether the Bank of Japan’s self-mortification will continue for much longer is questionable – because the yen has recently depreciated so much that the question of intervention or a change in the exchange rate is once again on the table.

The fact is that the globally unique zero interest rate policy on the Nippon is hollowing out the yen. The Japanese currency is steadily losing value, especially against commodity-based currencies such as the Australian dollar. We recently saw a strong upward impulse movement on the weekly chart, which was only briefly halted. The red resistance could soon be tested again.

Source: Bernstein Bank GmbH

The decline looks similar for other currencies. This reminded us of an analysis by the private bank Metzler, which advised some time ago to pay close attention to such rapid changes. In both the currency and bond markets, the central bank and the government must be careful not to let the situation slip.

Momentum is what counts
And Metzler continued under the title “The Bank of Japan’s pressure of suffering is increasing”: “The BoJ has repeatedly stated that it is not analyzing the absolute levels of exchange rates critically, but rather the speed of exchange rate changes. Therefore, it ultimately depends on the momentum whether we will really see yen-strengthening market interventions or whether it will remain verbal interventions.”

Impending national bankruptcy
The facts are well known: The Bank of Japan is pumping massive liquidity into the bond market on a daily basis to prevent a crash in government bonds. That would be national bankruptcy – because the BOJ holds more than half of the outstanding Japanese bonds. The ingenious financial blog “ZeroHedge” recently called the yen the “Japanese lira” with a cross-reference to Turkey. Unfortunately, the bond support is not causing the yen to plunge – but inflation to rise.

Other augurs commented along the same lines. The blog “SchiffGold” recently warned of a “Disaster Guaranteed To Happen” – in Japan, a train crash is happening in slow motion. Japan’s national debt is the equivalent of 9 trillion dollars, or 200 percent of gross domestic product. Interest payments alone account for around a quarter of government spending. And that with extremely low interest rates. If they were to rise to 4 percent, expenditure on interest would be higher than the entire national budget. Let us remind you that interest rates in the rest of the world are even higher, which means that investors are buying bonds in the USA or Europe and not in Japan.

Possible turnaround
But we should not declare the yen bulls dead – because the dead live longer. Some time ago, the Bloomberg news agency stated that the Bank of Japan had far greater potential for surprise interest rate hikes than its colleagues in Frankfurt or Washington D.C. With this in mind, keep an eye on the real-time news – Bernstein Bank wishes you successful trades and investments!

_________________________________________________________________________________________________________________________________

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7

15.11.2023 – The year-end rally is probably underway. Yesterday’s US figures on consumer prices could have been the initial spark.

Of course, we can only answer the question of all questions with absolute certainty in retrospect. Will the year-end rally that is always reliably predicted materialise or not? If we look at the reaction on Wall Street yesterday, it speaks volumes: the bulls want to invest. The S&P 500 rallied when the news with the Consumer Price Index hit the tickers, here is the hourly chart. The Russell 2000 with shares of smaller companies recorded the strongest rise this year at over 5 per cent. US bonds were in demand again.

Source: Bernstein Bank GmbH

This is what happened: CPI for October was reported cooler than expected. Thus, the monthly comparison was unchanged; most expectations had been for an increase of 0.1 per cent. In September, the increase had still been 0.4 per cent. Year-on-year, the inflation rate slipped from 3.7 per cent to 3.2 per cent – analysts had predicted 3.3 per cent.

Short squeeze
As you can see, even a slight undercutting of the forecasts caused a small buying frenzy. A lot of investment pressure has obviously built up. We also saw a short squeeze. The financial blog “ZeroHedge” said that a lot of hedge funds had been caught on the wrong foot. Even super bear Michael Burry, who became a billionaire with his big short during the financial crisis in 2008, was wrong recently, realised a massive loss and ultimately liquidated many positions.

Brake for the Fed
The take-home message from all of this is that the Federal Reserve now has far fewer arguments for raising interest rates further or even keeping them higher. According to the website Barchart.com, the market currently sees the probability of a new interest rate hike on 12 December and 30 January at zero per cent. In addition, investors are 90 per cent certain that the Fed will cut interest rates again from 30 April 2024.
Nick Timiraos, Chief Economics Correspondent for the Wall Street Journal, commented that the Fed’s last rate hike for the time being was in July. The journalist is regarded as the unofficial mouthpiece of the Fed, which uses this channel to prepare the market for what is to come. Timiraos continued: “The big discussion within the Fed at the next meeting will only centre on how the fact that the central bank is de facto on hold should be communicated.

Winning stocks wanted
Our conclusion: As is so often the case, a lot of capital from previously sceptical fund managers is likely to flow into the equity market at the end of the year. They will buy those shares that have already performed well anyway – no asset manager wants to be asked by their clients why they were not invested in the top stocks. It’s called window dressing – the best stocks are displayed in the shop window. And the best shares are in the major indices. So: bull market ahead.
Of course, it is quite possible that the bull run will be disrupted by external factors. An escalation in Ukraine or a big bang in the Middle East would encourage the bears again. So far, however, the conflict remains confined to Gaza, where the Israeli army is smoking out the Arab Waffen SS hideouts under hospitals, kindergartens and schools. Hezbollah and Iran are keeping a low profile so far. Nevertheless, you should of course keep an eye on the real-time news. Whether long or short – Bernstein Bank wishes you successful trades and investments!

_________________________________________________________________________________________________________________________________

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7

10.11.2023 – Told you so: Hopes for the approval of new spot-based index funds are boosting Bitcoin, Ether and co. Ether has ignited the price turbo after the registration of the iShares Ethereum Trust in Delaware. Now it’s the stock exchange supervisory authority’s turn.

No wonder that Ether rallied, here is the daily chart: iShares is backed by Blackrock, one of the largest asset managers in the world. The bulls are dreaming of huge amounts of money flowing into cryptos from previously skeptical, wealthy investors.

Source: Bernstein Bank GmbH

Of course, Bitcoin has also benefited from the hope of access to more investor money. That’s why we’re including two charts in today’s report, including the daily view.

Source: Bernstein Bank GmbH

The “Coin Telegraph” summed up the new gold-rush mood yesterday as follows: “today, Nov. 9, marks the start of the period during which the long-awaited spot Bitcoin ETF approval announcement from regulators could theoretically come.”
“Bloomberg Intelligence” also blew the same horn: “We still believe 90% chance by Jan 10 for spot Bitcoin ETF approvals.” Should these approvals come sooner, there will be windows with a wave for all outstanding applications. Currently, a dozen investment firms are waiting for their spot-based ETFs to be approved by the SEC.

Short squeeze
The bears assume that the authority will capitulate. According to “CoinDesk”, shorties in Asia have liquidated positions worth almost 50 million dollars in just four hours – a veritable short squeeze is underway.
And the icing on the cake is a statement from Goldman Sachs. According to this, institutional investors in particular have recently diverted a lot of capital into existing futures investments in cryptos. The inflow of funds in the week ending October 27 amounted to 437 million dollars – the largest weekly flow since July 2022.

150.000

It gets even better – we’ve reserved the close for a mega-bull: US asset manager Bernstein – no relation or affinity to your trusted CFD broker – sees BTC hitting 150,000 dollars by mid-2025. The reasons are the upcoming halving and the probable approval of the first spot Bitcoin ETFs.

To conclude, let’s pour a little oil on the waves: it is quite possible that many investors will cash out when the good news comes – sell the news. Or the SEC will play spoilsport. Whether long or short – Bernstein Bank wishes you successful trades and investments!

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The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7

07.11.2023 – The price of gold is heading for new records. Gold bugs point to the increased geopolitical risks. And then there is the American over-indebtedness.

As you can see, the daily chart has risen since the Islamofascists attacked Israel. This is exactly what we had predicted. Gold briefly broke through 2,000 and the all-time high of 2,081 is within reach despite the recent setback. Much will depend on whether the situation escalates or whether the conflict remains confined to Gaza.

Source: Bernstein Bank GmbH

One of those who believe in a new high is Tom Palmer. This is not surprising, as he is the CEO of Newmont Gold, one of the world’s largest gold producers. In an interview with the Financial Times, Palmer described the war in Gaza as an important catalyst for a new bull market. Ole Hansen from Saxo Bank said that a break of the 2,000 mark “can push gold beyond the prior record highs it saw around $2,050 in May this year, and March 2022.”
If gold manages to break out, that would indeed be interesting – after all, we are in a high-interest rate environment. The yellow metal has gained as a safe haven and at the same time defied the lack of buying mood among index funds, as the financial blog “ZeroHedge” reported.

Gold in the supermarket

On the one hand, small investors in particular stocked up: Just over a month ago, the wholesale giant Costco made headlines – like Metro, the company only sells to traders. The US group had started to offer gold in its supermarkets. In an analyst call, CFO Richard Galanti said that the bars had been snapped up from the shelves. He told CNBC: “I’ve gotten a couple of calls that people have seen online that we’ve been selling 1 ounce gold bars. Yes, but when we load them on the site, they’re typically gone within a few hours, and we limit two per member.”

Farewell to the dollar

Due to global politics, the fear of a financial collapse in the USA is creating a buying mood. Simon Black from the blog “SovereignMan” has just drawn a parallel with the 1970s: The US had to pull out of Vietnam; Watergate scandal; hostage crisis in Iran; two oil shocks; economic chaos and soaring inflation. And in the middle of this era – which reminded him strikingly of the country’s current weakness under an incompetent president – an epoch-making law was passed on November 14, 1974. It didn’t even have a name and was introduced by US Senator James Fulbright – it overturned Theodore Roosevelt’s executive order banning gold, which had been in place since 1933. After that, the price of gold took off: to 180 dollars in 1975, to 850 dollars in January 1980.
And now: Due to the gigantic debt of the USA of 33.7 trillion dollars, the 2,000 mark is only the next stop. Chaos is looming and by 2031 the USA will be spending 100 percent of its tax revenue on servicing its debt and social spending.

The masters of money are stocking up

Apparently, the world’s central banks are also assuming that paper money will be gutted. In any case, the world’s central banks bought 337 tons of gold in the third quarter – the third-highest figure ever recorded, as the lobby group World Gold Council recently announced. In the first three quarters, demand from central banks was 14 per cent higher than in the previous year; the 800 tons ordered to date is the highest figure ever recorded for a nine-month period.
China in particular has stocked up. Beijing increased its stocks for the twelfth time in a row in October: Stockpiles filled up by a further 23 tons to 2,215 tons. Just like Poland or Singapore, the People’s Republic is diversifying its reserves.
We are therefore curious to see whether we will experience a new golden bull run – Bernstein Bank wishes you successful trades and investments!

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The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7

06.11.2023 – Arabica coffee has just risen to its highest level for over four months. No wonder, as stocks are emptying. We shed light on the background.

A small bull run for Arabica: the past few days have seen an upward trend, here is the four-hour chart.

Source: Bernstein Bank GmbH

And this is the reason for the recent price increase: according to a statement on Friday, the stocks of Arabica managed by the Intercontinental Exchange (ICE) have fallen to a 24-year low of around 360,000 bags. It also said that there were currently no new goods waiting to be added to the warehouses. Reuters explained that the low level can be explained by the fact that the physical market is valuing the commodity higher than the prices achieved on the ICE. In other words, suppliers are expecting even higher prices.

Brazil and Colombia
John Goodwin, Senior Commodity Analyst at ArrowStream, recently told Bloomberg that falling stocks are another factor behind the bullish outlook for the coffee variety. Despite recent rainfall in Brazil, which is positive for the plants, it is far too early to focus solely on the rain. Because there are “still too many question marks out of Brazil and Colombia for me to believe this recent rally is already over.”

These are some of the question marks: The logistics situation in Brazil is anything but satisfactory. In addition, the relatively strong real against the dollar has recently dampened the export mood of producers. Cecafe, the Brazilian exporters’ association, reported in mid-October that exports of Arabica from Brazil had fallen by a fifth year-on-year. The 2.4 million bags shipped were the lowest level for this month in six years. Brazil is the world’s largest producer of Arabica. Colombia also had to contend with weather problems and insufficient pollination of the plants.

Is the boom sustainable?
However, after a heatwave in recent weeks, the rain is now returning in Brazil. Which promises a better harvest. The weather service Maxar Technologies recently announced that the growing areas in Brazil will receive moderate rain this week. Somar Meteorologia had previously stated that the Minas Gerais region in Brazil was receiving 130 percent of the historical rainfall level. Around a third of Brazil’s coffee is grown there. The World Bank is also counting on falling prices in the medium term: It expects supply to increase in Brazil, Vietnam and Colombia in the near 2024.

It should be noted that demand should not be overlooked. If the world slips into a deep and prolonged recession, this will also have a negative impact on the price of coffee. If the economy picks up again, demand will increase. We look forward to seeing how things develop and wish you successful trades and investments!

_________________________________________________________________________________________________________________________________

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice. CFDs are complex instruments and are associated with the high risk of losing money quickly because of the leverage effect. 68% of retail investor accounts lose money trading CFD with this provider. You should consider whether you understand how CFD work and whether you can afford to take the high risk of losing your money.7