International News 27/09
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Waiting for Powell's speech, gold is expected to reach US$3,000
Analysts anticipate that gold prices will continue to appreciate due to the likelihood of a US interest rate cut. The price of gold on the spot market reached a new record on Wednesday and is currently at a similar level. The strength of the gold price is attributed to speculative flows, despite the increasing US dollar and Treasury yields. Investors are awaiting the speech of Federal Reserve Chairman Jerome Powell, which will provide insight into the likelihood and depth of further rate cuts. The Federal Reserve has recently reduced its benchmark interest rate by 50 basis points, and market analysts now anticipate a 62% probability of an additional 50 basis point reduction in November. Further factors that may affect the gold market include US jobless claims data and the core personal consumption expenditure index, which is the Federal Reserve's preferred indicator of inflation. The price of gold has already risen by over 29% in the current year.
Warren Buffett Earns US$9 Billion by Offloading Bank of America Shares
Berkshire Hathaway, the company owned by Warren Buffett, has reported profits of approximately $9 billion since July. One of the recent strategic moves by Berkshire was the sale of an additional stake in Bank of America, which demonstrates the relationship between investments and market performance. Berkshire Hathaway sold approximately 21 million shares in Bank of America with a market value of $863 million between 20 and 24 September. Notwithstanding the aforementioned sale, Berkshire remains the largest shareholder in Bank of America, with a 10.5% stake valued at approximately $32.13 billion. It is noteworthy that should Berkshire's stake fall below 10%, there is no obligation to report share sales. Furthermore, Berkshire made sales of 45.6 million shares earlier this month, which has prompted inquiries into the rationale behind their investment strategy. Bank of America's CEO, Brian Moynihan, commended Warren Buffett as an exemplary investor who has played a pivotal role in the company's stability. However, Moynihan states that he is unable to request information from Buffett directly, indicating a lack of direct communication.Swiss Central Bank's Gilliran, Interest Rates Cut Again for Third Time
The Swiss National Bank (SNB) has announced a third interest rate cut this year, reducing its key interest rate to 1.0%. This decision is a response to the subdued domestic inflation and the rally in the Swiss franc. SNB Chairman Thomas Jordan, who will be leaving his position at the end of the month, stated that further rate cuts may be necessary to stabilise inflation within a price stability range. However, he did not provide specific details on the extent of the policy easing that may be required. The SNB anticipates that inflation will be lower than previously indicated due to the strength of the local currency, declining oil prices, and upcoming electricity price cuts. Following the interest rate decision, the Swiss franc strengthened against major currencies, with the US dollar and euro both declining in value against it.