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Reuters
26 minutes ago
- Reuters
Safe-haven gold dips as US-Japan trade deal eases some uncertainty
July 23 (Reuters) - Gold prices fell on Wednesday as a U.S.-Japan trade deal announced by U.S. President Donald Trump lifted risk appetite, while higher Treasury yields added further pressure. Spot gold was down 0.2% at $3,425.58 per ounce, as of 1010 GMT, after hitting its highest point since June 16 earlier in the session. U.S. gold futures also slipped 0.2% to $3,437.90. Trump struck a trade deal with Japan that lowered tariffs on auto imports and spared Tokyo from punishing new levies on other goods in exchange for a $550 billion package of U.S.-bound investment and loans. "Spot gold is paring some of its gains as the U.S.-Japan trade deal diluted demand for safe havens. The U.S. dollar's slight rebound is also weighing on bullion, though it's only natural that bullion bulls take a breather after the 3-day rally," said Han Tan, chief market analyst at The U.S. dollar index (.DXY), opens new tab steadied against its rivals after three straight sessions of losses, while benchmark 10-year U.S. Treasury yields rebounded from near-two-week lows. Higher bond yields increase the opportunity cost of holding non-yielding bullion, while a stronger dollar makes gold more expensive for holders of other currencies. U.S. and Chinese officials will meet in Stockholm next week to discuss an extension to the deadline for negotiating a trade deal, U.S. Treasury Secretary Scott Bessent said. Investors are also focussed on the U.S. Federal Reserve's policy meeting scheduled for July 29-30, with market expectations that rates will be held steady. Elsewhere, spot silver rose 0.2% to $39.37 per ounce, its highest level since late September, 2011. "Silver's supply-demand fundamentals are attractive and warrant a re-rating of prices higher and now that it is at a fresh 14-year-high, it remains to be seen whether the conviction is sufficient to breach the psychologically important $40 level," independent analyst Ross Norman said. Platinum rose 0.2% to $1,444.40 and palladium gained 1% to $1,286.93.
Telegraph
6 hours ago
- Telegraph
Rachel Reeves ‘used unrealistic figures' to persuade savers to invest
Rachel Reeves has been accused of using 'unrealistic' figures to persuade savers to invest their hard-earned cash. Last week, the Chancellor unveiled plans aimed at encouraging savers to put more money in the stock market, including 'targeted support'. This would allow banks to nudge savers holding cash in low-interest accounts towards higher-performing stocks and shares. In a report accompanying the Leeds Reforms, the Treasury said that moving £2,000 from low-return savings accounts into investments could 'make millions of people over £9,000 better off in 20 years' time'. The Government said that £2,000 in the stock market would be worth £12,000 after 20 years, whereas £2,000 in a savings account paying 1.5pc would grow to only £2,700 over the same period. This was based on research which found that the average stocks and shares Isa returns 9.64pc per year. However, Steven Cameron, of pension provider Aegon, said the figure risked creating 'unrealistic expectations' for savers. He said: 'To get from £2,000 to £12,000, which is what was in the Government's release, you'd need a compound annual return of 9.37pc after charges. 'If charges were 1pc, you'd need a return before charges of 10.37pc. That looks pretty optimistic as an estimate of likely returns over the next 20 years.' He continued: 'As a financial services industry, it would be very difficult for us to use figures like this, without many caveats and context. And in some cases, it just wouldn't be allowed by our regulators.' The Financial Conduct Authority (FCA) sets strict rules to ensure financial promotions are 'clear, fair and not misleading'. For example, companies must include a disclaimer saying that past investment performance does not guarantee future performance when marketing a financial product. In addition, the FCA states that pension providers must project three rates of return – low (2pc), intermediate (5pc) and high (8pc). According to Aegon's calculations, if the Treasury had used the same three rates to calculate future performance, then the maximum projection would be £7,739 compared to the £12,000 figure used in its example. Mr Cameron said: 'We very much welcome targeted support and the ability to go further to suggest courses of action to groups of customers, such as those with excess cash. But we also need to be realistic in the claimed benefits of investing some of this.' Sarah Coles, of stockbroker Hargreaves Lansdown, also said the Government could have provided a more 'holistic' view of the options available to savers. 'The choice to compare investment returns to a miserable rate on offer from a high street giant is valid, given how much of people's savings is still languishing in these accounts. 'But the fact is they could do much better by moving to a competitive rate with an online bank or savings platform, and making this clear would have given a more holistic view of their options. 'Having said that, the Government is making a vital point that over the long term, investments will outperform cash in the vast majority of cases.' Ms Reeves is looking at reforming Isas and savings to boost investment in the UK. The hope is that targeted support, which comes into effect next April, could help some savers take advantage of superior returns. The Chancellor has put on hold controversial plans to cut the amount a saver can put tax-free into a cash Isa from £20,000 to as little as £4,000. However, she announced in her annual Mansion House speech that she was still considering 'changes' which could restrict how much can be saved tax-free every year. She said in last week's speech: 'For too long, we have presented investment in too negative a light, quick to warn people of the risks, without giving proper weight to the benefits, and our tangled system of financial advice and guidance has meant people cannot get the right support to make decisions for themselves. 'That is why we are working with the FCA to introduce a new type of targeted support for consumers ahead of the new financial year.'
Times
6 hours ago
- Times
Should you help your children buy a home?
Homeownership is a distant dream for many young people, despite recent efforts by the Treasury and regulators to loosen lending rules. The Bank of Mum and Dad now helps more than half of first-time buyers on to the property ladder, according to the estate agency Savills. But is this a necessary act of generosity or is it helping to fuel the housing crisis? We hear both sides of the argument. The Bank of Mum and Dad is not a benevolent institution. It is an inequality engine. Helping your kids get on the property ladder may feel like good parenting, but it fuels a system that rewards birthright over merit and privilege over effort. And this is not just about fair play — although that matters. It is about distortion. Housing should be about what you earn, not who you are born to, and yet we're hurtling towards a feudal set-up where access to shelter hinges on parental wealth. In 2023 more than half of first-time buyers had financial help from family — so much for social mobility. • Read more money advice and tips on investing from our experts Meanwhile, the parents are often the ones doing the sacrificing. Draining pensions, dipping into savings, compromising their retirement or their future care needs to prop up a politically induced broken housing system. Others face tricky family politics. What if one child gets help and another doesn't? Suddenly the family WhatsApp group turns into a minefield. And don't forget the long-term cost, because if that gifted deposit pushes mum or dad below the threshold for local authority-funded care, the state picks up the tab. So we all end up paying for this bad idea. It also warps the market. When we inflate demand from cash-boosted buyers, it keeps prices high and shuts out the truly independent. It's no coincidence that areas with the most intergenerational support are often the least affordable — and the most resistant to change. Many of those lobbying against new homes do so under the guise of 'heritage' or 'environmental protection'. All the while ignoring the paradox: if you really want to help your children, stop blocking homes for them to live in. This is the real betrayal of Britain's working class. We have normalised parental bailouts instead of fixing the system. Homeownership should be a reward for work and not a birthright. Parental gifts may be well intentioned. But they entrench inequality, destabilise retirement and price out millions. Let's call it what it is: a personal favour that perpetuates a national failure. • Rachel Reeves is right, but she is walking a tightrope — with our money Helping your children get on the property ladder is a deeply personal decision — but if you're in a position to offer support, I'd argue it is a good idea. Intergenerational fairness is one of the strongest reasons why helping your child buy a home is the right thing to do. Many parents benefited from a housing market that has since become vastly less accessible. In the 1980s the average age of a first-time buyer was about 27. Today it's closer to 34 — and that's often with help. Property prices have risen much faster than wages, making it almost impossible for many twentysomethings to buy without a financial leg-up. If you plan to pass on wealth to the next generation, why not do it when it could make the biggest difference? An inheritance often arrives when adult children are already financially stable or even nearing retirement themselves. But helping them in their earlier years will allow them to stop wasting money on rent and start investing in a secure, long-term home. A study by the HomeOwners Alliance found that 54 per cent of homeowners with adult children had either already helped them buy a home or expected to in the future. Among homeowners whose children do not yet own property, 59 per cent worried about their chances of ever buying a home. But help doesn't have to mean writing a big cheque. There are several ways in which parents can support their children without handing over large sums. You might consider acting as a guarantor on a mortgage or getting a joint mortgage with your child. There are also distinct financial advantages to the so-called Bank of Mum and Dad. A gift used for a house deposit is inheritance tax-free, provided you live for seven years after giving it. This can also reduce the size of your estate and potentially lower inheritance tax on other assets. Helping with a deposit means your child may qualify for better mortgage rates, so that they have lower monthly repayments. A larger deposit can also help them to buy a better home — whether that means a larger space or a more suitable location — and reduce the need (and cost) of them moving again soon. Of course, this all depends on your own financial situation. And one final piece of advice: be fair. Helping one child and not others can lead to family tensions. If you're lending, be clear and be consistent.
