The GENIUS, Clarity, and Anti-CBDC Acts, recently passed by the US House / Senate aim to solidify US leadership in digital financial technologies but may also lead to financial instability, increase US debt, and diminish SWIFT's dominance in cross-border payments. Recent erratic behaviour of the dollar has disrupted forex trading strategies and may signal a shift away from the dollar as a safe haven.

The trade agreement between the US and the EU has sparked criticism from some EU nations, who view the deal as favouring US interests.

Finally, Chinaʼs trade restrictions on rare earths, amidst rising demand, have prompted nations to create new supply chains, creating potential investment opportunities in India, Brazil, Canada, the US, and the EU.

All precious metals and commodities, however, continue to follow a long-term upward trajectory.

 

US meat exports to China have declined significantly in 2025, with bovine exports down 90% year-over-year. Poultry and pork exports reflect a similar trend, falling by 97.5%, and 86.6%, respectively. These exports often consist of cuts less favoured by US consumers, such as chicken feet, and therefore will do little to increase domestic supply and ease prices.

In June, the price of ground beef in the US rose by 10.3% while steak increased by 12.4%. Tariff policies, and the responses they provoke, may begin to show negative consequences for the affected sectors. With a substantial portion of US manufacturing dependent on exports, the loss of key markets is likely to negatively affect overall manufacturing and export activity.

Since 2011, Switzerland’s industrial production has increased by 40%, even amidst recent economic stagnation in neighbouring nations. In 2024, Switzerland recorded a trade surplus of over 60 billion CHF, despite the franc appreciating notably against the euro. As the EU is a major trade partner, a strong franc can pose challenges for Swiss exports, as they become more expensive for importing nations.

Nevertheless, demand has remained strong despite rising costs.

Switzerland‘s success stems from its focus on a highly specialised, high-value industrial base. This success is further driven by an emphasis on quality and innovation in sectors such as pharmaceuticals, precision machine tools, and luxury watches. The country has also seen rising labour productivity and leads global innovation with the highest number of patents per capita. Stable public administration and a freedom-oriented economic framework have further contributed to Switzerland’s prosperity.

 

 

Precious Metals and Commodities

Gold and silver are expected to rise in the short- and mid-term, while copper, oil, and agricultural commodities are projected to remain flat. All precious metals and commodities, however, continue to follow a long-term upward trajectory.

 

Market Risk Signal

 

Gold vs stocks forecasting model

The current level of debt relative to real economic output is comparable to the situation in the Germanic nations prior to the World Wars in the 1910s, and in France before the French Revolution in the 1790s.

In such high-debt scenarios, the likelihood of instability and a deleveraging process increases significantly.

As gold holdings are typically free from counterparty liability, the impact of deleveraging tends to be much milder on gold prices than, for example, on equities. The anticipated deleveraging process can be modelled using coupled differential equations, which suggest that gold is likely to outperform stocks from 2022 onwards. This model was calibrated in 2019 and has not been updated with new data since.

According to the model, the peak period during which economic activity assets (such as equities) outperform gold occurs around Q3 2022. From that point forward, the model predicts a sustained outperformance of gold relative to stocks (light line). When compared to real data on the stock-to-gold price ratio (dotted line), the trend of gold outperforming equities appears to have begun in early 2022.

Whether a short-term reversal will occur remains uncertain; however, the long-term trend towards stronger gold performance remains evident.

 

Gold Feature

According to the World Gold Council, physically backed gold ETFs saw inflows of 38 billion USD in the first half (H1) of 2025 - the strongest semi-annual performance since 2020 across all regions. Asian investors set a record by contributing 28% of global flows, despite holding only 9% of total assets under management (AUM). European flows turned positive after consistent outflows since H2 2022. By the end of H1, rising gold prices and strong inflows pushed global gold ETFs' AUM to a record USD 383 billion, with holdings reaching 3,616 tonnes - the highest level since August 2022.

Gold-backed ETFs offer investors an accessible way to gain exposure to gold through shares traded on secondary markets (such as the NYSE), while ensuring the underlying value of these shares is backed by physical gold. The creation and management of a gold-backed ETF involves several key entities:

• the sponsor (who creates and manages the ETF),
• the custodian (responsible for safekeeping the assets),
• the administrator (overseeing daily operations),
• and the authorised participants (or APs — typically large financial institutions that manage the creation and redemption of ETF shares).

Shares are created in the primary (over-the-counter gold) market and made available in the secondary market by the APs. APs help maintain correct pricing and market equilibrium by managing supply and demand. When demand is high, APs create new shares by purchasing physical gold and delivering it to the ETF’s custodian in exchange for newly issued shares. Conversely, when demand declines or APs seek redemption, they return shares to the ETF administrator in exchange for the underlying gold.

However, it is important to note that typical investors cannot convert ETF shares directly into physical gold. For those seeking long-term wealth preservation and a hedge against economic uncertainty, physical gold may be the more suitable option. It provides tangible security and independence from the financial system, making it a more reliable store of value over time.

 

02 Sep 2025 | Categories: Gold, Silver, China, Dollar, US, UK, Switzerland, Commodities

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