Last week was a rollercoaster ride in the world of finance - and stick with me until the end of this blog, as I'll show you that 2 years ago - we saw this coming!
Two big news events made headlines this week: the UK revealing its debt has reached a new high, and the US Federal Reserve surprising everyone by cutting interest rates by 50 basis points. Oh, and let’s not forget rising tensions in the Middle East, which are sending shockwaves through oil, gold, and stock markets. If that wasn’t enough, gold (XAUUSD) hit an all-time high last week, and my top pick, XAUGBP, is breaking records today!
So, let’s break it down and see how these pieces connect and what they mean for our financial future.
UK’s Debt Hits New Heights: What’s Going On?
First up, the UK. Shadow Chancellor Rachel Reeves announced that the UK’s debt has surged to over 100% of GDP—meaning the country now owes more than the entire value of its economy. Imagine earning $50k a year but having $60k in credit card debt. Not exactly a great situation.
This mountain of debt is putting pressure on the British pound (GBP). Investors are losing confidence in the UK economy, which could weaken the currency further. The Bank of England might have to keep interest rates higher for longer to control inflation. So, while this might help prop up the pound a bit, it could also mean more pain for homeowners with mortgages and slow economic growth.
US Rate Cuts: Time to Spend or Panic?
Meanwhile, the US Federal Reserve slashed interest rates by 50 basis points, and rumours are swirling they’ll do it again in November. A rate cut is essentially the Fed’s way of trying to stimulate the economy by making borrowing cheaper. But there’s a catch: a lower interest rate usually means a weaker US dollar (USD).
A weaker USD could push up the prices of commodities like oil and gold. And speaking of gold, this move plays perfectly into the metal’s strengths. As people flock to safe-haven assets during uncertain times, gold benefits—and we saw it hit all-time highs again last week!
Middle East Tensions: What This Means for Oil, Gold, and Stocks
As if debt and rate cuts weren’t enough, tensions are flaring in the Middle East, and markets are reacting fast.
Oil prices are likely to jump. The Middle East is a major oil-producing region, and any instability there has the potential to disrupt supply chains. So, we could see oil prices spike, which will be felt at the pump and in your heating bills.
Gold is the go-to asset in times of crisis. With the Fed cutting rates and rising geopolitical tensions, people are flocking to gold as a safe haven. XAUUSD hit all-time highs last week, and my personal favourite, XAUGBP, is absolutely soaring, reaching record highs today. It’s the perfect hedge in times like these when currencies are looking unstable, and global events are causing uncertainty.
Stocks are caught in the middle. Rising oil prices mean higher costs for businesses, and with tensions brewing in the Middle East, there’s potential for a stock market wobble. If oil continues to climb, companies with high transport and production costs could see profits squeezed, leading to stock volatility.
Why XAUGBP Is My Top Pick
Let’s talk about why XAUGBP is my top pick right now. With the British pound under pressure from the UK’s debt issues and the ongoing economic uncertainty, gold priced in GBP is having a field day. XAUGBP is making extreme gains, and it hit another all-time high today. It’s clear that as investors lose confidence in the pound, they’re turning to gold to preserve their wealth. And with rising demand, prices are following suit. If you haven’t looked at gold in GBP terms yet, now might be the time!
What to Watch Out For
Here’s how things could play out:
British pound (GBP): Continued pressure as the UK grapples with its debt issues. The Bank of England may be forced to keep rates high, which could create short-term support, but long-term prospects are shaky.
US dollar (USD): More rate cuts could weaken the USD further, pushing up gold and oil prices. Keep an eye on the Fed’s next moves.
Gold (XAUUSD and XAUGBP): Both are benefiting from the perfect storm of economic uncertainty, weaker currencies, and geopolitical tensions. XAUGBP is leading the charge with extreme gains—so if you’re looking for a star performer, this is it.
Oil prices: Higher prices could hit global economies, particularly if tensions in the Middle East escalate. Expect stocks in transport and manufacturing to feel the heat.
September 2022...
Back in September 2022, we were discussing these exact things with members and I issued this Facebook post:
The truth is, when you educate yourself, you gain the ability to turn even negative news into profitable opportunities. Now, day trading is a different beast—we’ll teach you how to read charts every single day. But here, we’re talking about building long-term wealth. What do you do with your money once you’ve made it?
Personally, I diversify my portfolio across stocks, gold, crypto, and businesses to safeguard and grow my wealth. Don’t get me wrong—I’ve made some bad calls, especially with risky crypto investments a few years ago. But by sticking to my strategy of not over-investing in those high-risk areas, the rest of my portfolio was able to absorb the losses and come out on top. So, what’s your plan? Let me know in the comments.
Let me show you how these charts have played out since my Facebook post two years ago—because those strategies are still delivering results today.
Gold vs US Dollar: We caught the low of this entire move and currently at +60% gains
Gold vs GBP: Again we pretty much caught this low of the last 2 years with +33% gains
Bitcoin vs US Dollar: Again I pretty much called the low on this, I have a more detailed analysis of BTCUSD too, which shows the exact move forecasted and subsequently played out. I'll share it another time. Bitcoin saw +292% from Sept 2022 to the highs just a few weeks ago!
Silver vs US Dollar: Again I forecasted this around the lows of this entire move with +73% gains
Silver vs GBP: Silver struggled and didn't come out of the blocks at the same time as gold, but it's never looked back since the beginning of the year, with an impression +50% in the last 9 months!
The Bottom Line
In a week filled with major financial news, the outlook for currencies, commodities, and stocks has shifted. The UK’s debt crisis is weighing on the pound, the US rate cuts are weakening the dollar, and rising tensions in the Middle East are pushing oil and gold prices higher. If you’re looking for a safe bet amidst all the uncertainty, XAUGBP is proving to be a top performer, breaking records and offering a solid hedge against both currency weakness and global volatility.
Hold onto your hats—things are about to get even more interesting!
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