Central Bank Policies and Inflation Outlook
- Federal Reserve officials and minutes indicate a shift toward more restrictive policy stances (p. 9, p. 17).
  - Kevin Warsh stated at Jackson Hole that forward guidance has outlived its usefulness, noting that 54% of PCE basket components remained elevated (p. 9).
  - July Fed minutes showed a 12-0 vote to hold rates, though three members preferred a 25-basis-point increase (p. 17).
- The European Central Bank (ECB) is highly expected to implement a 25-basis-point rate hike in September (p. 20).
  - ECB Board Member Isabel Schnabel indicated further tightening is necessary as inflation is unlikely to return to target in the medium term (p. 20).
Precious Metals Market Dynamics and Geopolitical Events
- Gold and silver prices retreated below $4,400 and $65 respectively at the end of August due to hawkish signals and PCE data (p. 10).
  - Indian Prime Minister Narendra Modi requested citizens to curb gold purchases to manage the trade deficit, despite rupee-term gold prices being 35% higher than the previous year (p. 10).
- Corporate and state-level developments impacted platinum and gold holdings (p. 11, p. 37).
  - Northam Platinum initiated a strategic process after an unsolicited approach, with discussions believed to have occurred with Valterra (p. 11).
  - The Bank of England continues to freeze 31 tonnes of Venezuelan gold reserves ($4.3 billion) due to non-recognition of the Maduro administration and his election in 1988 (p. 37).
  - Uruguay added approximately 0.7 tonnes of gold to its reserves in Q2, bringing its total to one tonne (p. 37).
Global Trade, Tariffs, and Economic Indicators
- The US trade deficit reached $118.8 billion in July, accompanied by new tariff structures including a Section 338 tariff on certain Canadian imports starting in 2026 (p. 13).
- China's economic transition shows high-tech and green sectors rising to an estimated 18.4% of GDP in 2025, while property-related industries fell to 18.3% (p. 22).
- August manufacturing PMIs diverged globally, with Germany rising to 54.1 and India falling to 52.9 (p. 23).
- Bloomberg's August surveys adjusted 2026 GDP forecasts, raising the US to 2.2% and China to 4.8% (pp. 24-25).
Market Indicators, Exchange Positions, and Forecasts
- Gold correlations with the VIX and MOVE remain negative, while its 5-year correlation with the Misery Index has turned positive (p. 34, p. 35).
- COMEX gold stocks rose by 17.8 tonnes in the week ending August 31, and LBMA vaulted gold and silver rose by 70 tonnes and 428 tonnes respectively in July (p. 40, p. 44).
- Supply and demand forecasts for precious metals show varying balances (pp. 46-49).
  - Gold is forecasted to have a 1,647-tonne surplus in 2026 (p. 46).
  - Silver supply is forecasted at 33,550 tonnes for 2027 (p. 47).
  - Platinum is projected to have a physical surplus of 538 thousand ounces in 2027, while Palladium is projected to have a physical deficit of 343 thousand ounces (pp. 48-49).

Warsh opens up (a bit) at Jackson Hole; ECB Minutes support a hike - and much more

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