How DeepSeek is challenging US hegemony

The unexpected appearance of DeepSeek’s open-source Chinese AI model is shaking up Silicon Valley and global markets. Launched on 20 January, it offers comparable performance to the OpenAI flagship at a fraction of the cost, using less advanced microchips.

 

The launch of DeepSeek’s new model, just as Donald Trump was sworn in as US president on January 20, was no coincidence. China was sending the message that, despite Washington’s restrictions on the export of next-generation microchips to curb the technological development and competitiveness of Chinese companies, Beijing can be the world leader in AI.

A day later, Masayoshi Son, CEO of SoftBank, Sam Altman, CEO of OpenAI, and Larry Ellison, chairman of Oracle joined the new Trump administration as it announced a private sector investment of up to $500 billion to fund infrastructure for artificial intelligence to outpace rival nations in this business-critical technology.

 

Impact on global stock markets

The White House announcement did not prevent the stock market plunge of companies such as Nvidia, one of the pillars of the technological revolution generated by AI and the main manufacturer of microchips in the supply of hardware for AI, which saw its shares fall by more than 15%, losing 589 billion dollars in a single day.

It was the biggest loss of value by a stock in the history of the stock market and relegated Nvidia to third place in the ranking, behind Apple and Microsoft.

Nvidia’s fall dragged down other technology giants and several companies linked to chips and semiconductors: Advanced Micro Devices (AMD -10.38%), Marvell (-19.11%), Broadcom (-17.40%) and Grail (-9.16%), Microsoft (-2.17). This turmoil also affected European stock markets, with significant falls in companies such as ASML (-8%), Schneider Electric (-10%) and Siemens (-5%).

Investors were concerned that DeepSeek’s innovative approach would lead to a collapse in demand for graphics processors and other components in data centres, which are essential for the development of AI.

 

A disruptive business model

One of the keys to the success of the Chinese AI model is the demonstration that the industry is capable of developing efficient and practical artificial intelligence without the need to rely on Nvidia’s advanced and expensive microchips. Thanks to Washington’s restrictions, the company was forced to use H800 model microchips, a less powerful version of those available to US companies.

In addition, DeepSeek claims that with its new technologies, it can reduce algorithm training costs by 75%, noting that it has invested only $7 million in developing its model, compared to the $50 million OpenAI has spent on ChatGPT. As a result, it can offer access to its interface for just $0.14 per million input tokens, far less than the $15 OpenAI charges for the same service.

The other pillar of DeepSeek’s success is its open-source approach, which allows any developer to modify and adapt the software to suit their needs. A business model that contrasts with the more restrictive uses that Western companies impose on their AI applications. It is therefore not surprising that, on Wednesday morning, DeepSeek became the most popular application overall, not just for AI, in the Apple and Google app shops.

DeepSeek’s breakthrough is proving that US technological hegemony in AI is no longer guaranteed. There is little doubt that sooner or later Washington will also impose bans and restrictions on this new Chinese competitor under the pretext of national security, as it has previously done with ZTE, Huawei and TikTok, but, ironically, the increasing aggressiveness of the US administration in the geopolitical framework to prevent the collapse of the empire is accelerating the development of technological, commercial and financial alternatives by other global players.

If you want to discover the best option to protect your savings, enter Preciosos 11Onze. We will help you buy at the best price the safe-haven asset par excellence: physical gold.

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Els ETF són uns productes financers que aquí es coneixen com a fons d’inversió cotitzats. Es tracta d’uns actius financers híbrids, entre els fons d’inversió tradicionals i les accions, que segueixen l’evolució d’un determinat índex de referència. 

 

ETF (de l’anglès exchange traded funds) o fons d’inversió cotitzats, són uns fons d’inversió que cotitzen en els mercats de valors. La característica principal d’aquests productes financers és que combinen la diversificació que ofereix una cartera d’un fons d’inversió amb la flexibilitat de la compravenda d’accions.

La seva política d’inversió consisteix a replicar un índex borsari: de renda fixa, de primeres matèries, d’un sector, etc., cosa que els fa molt atractius. D’aquesta manera són un producte molt utilitzat per invertir per tendències o temàtiques perquè, un cop agrupats els actius d’una tendència en un índex, els ETF en repliquen el comportament.

Operativa dels fons cotitzats

Quant a la seva operativa, és igual que la de les accions, ja que cotitzen durant tota la sessió borsària i tenen un valor liquidatiu que es publica al tancament de la sessió. És a dir, el seu valor real no es coneix fins al final de la jornada borsària.

Poden invertir en fons cotitzats tota mena d’inversors, tant institucionals com particulars, els quals poden comprar un ETF a temps real, al preu que fixi el mercat en cada moment. La cotització podrà variar al llarg d’una sessió borsària en funció de l’oferta i la demanda, com passa amb qualsevol altre valor cotitzat, cosa que facilita una gran transparència per als inversors. 

Tipus d’ETF

Encara que tots els ETF repliquen el comportament d’un índex de referència, això es pot portar a terme de diferents maneres: 

  • ETF de renda fixa: es comporten de la mateixa manera que els títols o bons de deute, tant públics com privats.
  • ETF d’actius monetaris: representen a actius de deute a curt termini i actius monetaris negociats en el mercat interbancari.
  • ETF segons capitalització: pot ser petit, mitjà o gran segons la capitalització de les empreses que el conformen.
  • ETF sectorial: repliquen índexs d’inversió d’un determinat sector.
  • ETF segons l’estil de gestió: fons que inverteixen en empreses amb un cert valor o amb expectatives d’un bon creixement a mitjà o llarg termini. 
  • ETF sobre divises: existeixen productes que repliquen l’evolució de les cotitzacions del mercat de Forex.

Els riscos que comporten els ETF

Tot i que hi ha ETF específics amb cobertura per minimitzar el risc de divisa, és important tenir en compte que els ETF no gaudeixen de cap garantia: com en el cas de qualsevol inversió en renda variable o fixa, hi ha un risc de pèrdua del capital invertit inicialment.

Invertir en ETF implica assumir un nivell de risc determinat que dependrà de la composició de l’ETF, de les fluctuacions del mercat i d’altres factors associats a la inversió en valors. Aquests actius d’inversió acostumen a ser fons de renda variable, excepte els que repliquen índexs de renda fixa, per la qual cosa, en general, presenten una volatilitat elevada. 


Si vols conèixer opcions superiors per rendibilitzar els teus diners, entra a
Fons Garantits. Des d’11Onze Recomana et proposem les millors opcions del mercat.

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Quan se’ns parla dels diners es comenta que són covards, que busquen la inversió segura, que fugen de la incertesa, que s’amaguen en aquelles inversions que donen molt rendiment. Però això es basa en uns supòsits simplificats de la realitat que hauríem d’examinar abans de creure’ns tot allò que se’ns diu. I un d’aquests supòsits és permetre que la informació que circula sobre les inversions sigui transparent i fiable

 

Quan es discuteix sobre “com organitzar” sempre hi ha una certa tendència derivar cap a la macroeconomia. Per exemple, quan es discuteix la viabilitat de l’Estat català, es confonen termes relacionats amb el “mercat” i l’“organització”.  Es diu que Catalunya no és viable perquè no és atractiu el seu mercat per a invertir-hi, referint-se a la mida del territori o al nombre d’habitants. D’altres comenten les dificultats organitzatives, sobretot de manca d’economies d’escala per tenir costos assumibles. Altres, mirant el mercat del deute, diuen que les emissions de deute català no tindrien sortida.

Per començar, la decisió d’una empresa d’invertir a Catalunya pot valorar-se d’acord amb si troba sinergies entre el seu sistema de valors corporatius i els de la cultura catalana (aspecte organitzatiu). I això sí, haurà analitzat abans sí els mercats potencials la fan viable. Per exemple, si es tracta d’un centre comercial, quantificarà si la localitat on se situï té potencial suficient (res a veure amb els habitants de Catalunya, si no del poble o ciutat en qüestió). Una empresa de serveis mirarà si té accés a mà d’obra qualificada i si la situació geogràfica li dona accés a altres mercats.

Invertir amb consciència

Cal observar aquests dies que aquells que valoren les inversions per assessorar a on han d’invertir els diners aquells que en tenen, tampoc es posen massa d’acord. De cop i volta el bo espanyol es qualifica de bo “escombraries”, i la prima de risc s’enfila. Llavors les declaracions d’alguna autoritat competent fan que torni a baixar la prima i sembla que les aigües turbulentes es tornen més tranquil·les. En cas de tenir diners, els invertiria seguint altres consells menys volubles, però suposo que les agències de ràting les formen persones que valoren la informació que reben, i la deuen fer circular de la millor manera possible, és a dir, en realitat, no deixen de ser persones que miren les notícies i les interpreten a la seva manera. Mirem el cas de Catalunya, tots podíem llegir a certa premsa internacional que havia demanat un rescat a l’Estat Espanyol.

Això sí que fa riure. Seria com si jo ingressés el meu sou a un compte de la comunitat de veïns, i la comunitat de veïns em digués que em rescata quan li dic que em doni diners per a pagar la quota de la comunitat

El problema arriba quan aquesta informació que es fa circular potser no és tan confiable com caldria, i les opinions acaben essent certeses que tenen conseqüències molt greus en l’àmbit dels interessos que s’han de pagar pels diners que ens deixen.

Tornem a un exemple casolà, seria com si el rebut de la hipoteca d’un mes a l’altra passés de 800 a 1200 euros perquè el meu veí li diu al banc que no podré pagar, i ho diu perquè un botiguer li explica al meu veí que em va fiar la darrera vegada i li dec la factura de la verdura. En aquests moments m’alegro que la meva hipoteca estigui ben firmada davant d’un notari i inscrita al registre de la propietat! També m’alegro de no haver de fer una ampliació d’hipoteca en aquests moments que el veí i el banquer es troben per conversar sobre les meves minvades finances. 

Més organització o menys mercat

Potser la clau és començar a parlar més de direcció d’organitzacions que d’economia de mercats. Perquè la realitat supera la teoria dels mercats perfectes i una de les raons de ser de l’organització anomenada “Estat” és precisament veure com es poden utilitzar els mercats com un instrument per millorar la vida de les persones. Acceptar que els mercats no són espais perfectes d’intercanvi entre individus, sinó que moltes vegades falta oferta, falta demanda, o bé totes dues.

Així que més que dir que els diners són porucs, podríem dir que depèn. Depèn de qui els té, i com és aquella persona, depèn de si creu en la inversió, o senzillament es tracta de diners sense ànima buscant maximitzar beneficis a curt termini, minimitzar riscos i no comprometre’s amb cap projecte concret. 

Molts petits empresaris utilitzen els diners que guanyen per a poder tirar endavant la seva autoocupació i l’ocupació de les famílies que en depenen, arriscant el seu patrimoni, i fins i tot, invertint quan no hi ha finançament garantit per les entitats que l’haurien de garantir. Aquests diners no els veig porucs, sinó més aviat al contrari, són valents. Però anem a pams, moltes de les opinions que escoltem del món empresarial, les fan moltes vegades grans directius, que no arrisquen el seu capital, i que no són estrictament empresaris.

Suposo que els empresaris, sobretot de PIMES, es troben ocupats treballant i intentant treure forces i recursos d’on sigui per a continuar vius i amb esperança. Ja està bé de parlar dels diners porucs i covards, i comencem a centrar-nos en les persones que els tenen a la butxaca i mirem què en fan. Això portaria a un debat molt més fructífer i productiu. I més autèntic.

 

11Onze és la fintech comunitària de Catalunya. Obre un compte descarregant l’app El Canut per Android o iOS. Uneix-te a la revolució!

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Gold’s role as an indispensable asset for diversifying and de-risking an investment portfolio in the face of economic uncertainty is well established. Yet, according to an analysis by the World Gold Council, it can provide a higher long-term return than is generally assumed.

 

Although it is generally perceived as a conservative option to reduce investment risk and its primary function is as a store of value, a report by the World Gold Council (WGC) concludes that traditional analyses of gold’s returns miss some important factors that reveal a better long-term return than is often thought.

According to the WGC, frameworks exist for estimating long-term gold returns, but they lack a robust approach that conforms to capital market assumptions for other asset classes. These estimates are closely correlated with the general price level as measured by the consumer price index (CPI). According to this assumption, the expected long-term return on gold is typically in the range of 0% to 1%.

However, the agency’s analysis concludes that, while existing studies are rich in information, they are often based on two patterns that, in its view, “mischaracterise gold and have led to biased conclusions”.

 

The Gold Standard and financial investment

To begin with, almost all models use data from gold standard periods. Although the World Gold Council accepts that as a general rule it is better to have as much historical data as possible when analysing gold prices, the longer chronology skews the data because, for most of the 20th century, the price of gold was set by central banks.

“While its historical performance during the Gold Standard periods is an interesting benchmark, what is more important is its market structure and behaviour after 1971”. Therefore, in order to avoid this bias, the agency uses data from 1971 onwards to do its analysis.

The other factor that can make the analysis of gold’s long-term behaviour unreliable is that models often assume that financial investment almost exclusively drives demand, ignoring other important demand factors. According to the study, financial investment accounts for a relatively small percentage of demand relative to existing gold reserves, while other sources are more important in the long run.

In conclusion, using this revised model proposed by the World Gold Council, the returns of gold has been much better over the last 50 years than conventional analysis suggests, with an annual average of 8%. The same model forecasts an average annual return of 5.2% over the next 15 years.

 

To discover the best option to protect your savings, enter Preciosos 11Onze. We will help you buy at the best price the safe-haven asset par excellence: physical gold.

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Gold is traditionally regarded as the best asset for inflation protection, a reliable hedge against the risk of losing purchasing power. However, some investors see government bonds as a safer alternative to invest their money in the face of market uncertainty. We analyse the advantages and disadvantages of these two options.

 

Gold purchases over the past three years have had a stellar performance with record highs for investors and have seen a 40% rise in value. The safe-haven status generally attributed to gold has been confirmed by the uncertainty caused by the pandemic and subsequent inflation, which has penalised the performance of other assets. Once again, gold has provided a valuable hedge against an uncertain future.

Some economists argue that gold only increases in value when a currency is devalued or in a context of high inflation, and that it does not offer adequate returns in other market scenarios. While it is true that gold tends to increase in value in times of financial instability or currency devaluation, these are not the only factors that increase its valuation above average. For example, in the period from 2013 to 2020, inflation was very low, and the most damaging effects of the crisis and economic instability had already been overcome in much of the world, yet the value of gold rose steadily.

Even so, we have to bear in mind that, if we choose to invest in gold through an investment fund or ETF, we will not own the precious metal, which means it loses much of its intrinsic value, and it is a model that gives more versatility, but requires basic stock market knowledge that requires professional intermediaries in the sector. When you buy physical gold, you own the metal, whereas when you invest in digital gold, you have a right or an option. Moreover, because it is not a book entry, you cannot suspend payments. Unlike other financial assets, gold can always be on hand.

 

Government bonds

The biggest attraction of buying government bonds is that we are assured of a certain return, positive or negative, on the investment. This may seem contradictory, because historically, when someone lends money to someone else, they charge them interest, and therefore it may seem difficult to understand why some bonds are trading with a negative return.

This apparent inconsistency is due to the fact that some large investors seek safety in safe-haven assets, such as government bonds, during times of financial market turbulence. The 2008 crisis, with the collapse of Lehman Brothers and other banks, showed that the Deposit Guarantee Fund, which in Spain covers 100,000 euros per customer and institution, is nothing more than a consolation prize if we are talking about deposits of millions of euros.

Therefore, when we are talking about investment groups with large amounts of money, it may be preferable to buy bonds from countries with the highest credit rating (AAA), even when they offer a negative yield, since, unlike banks, this guarantees us pretty much all of our assets. Still, there may be a speculative motive: buying debt with a negative yield in the expectation that this yield will fall further so that the price of the bonds will rise.

This is a scenario that is hardly applicable to the medium or small investor, who tends to buy securities issued with a nominal value and which pay an explicitly determined interest on the investment, quarterly, every six months, or at maturity. And yet, they can also be traded on the stock market to offer investors the possibility to sell or buy before their maturity.

 

Security and profitability

Before investing, there are many factors to consider when deciding which financial asset is most suitable for us. And it is vital to assess the risk we are willing to take and to clearly define our investment objectives. As a general rule, the higher the return on an investment, the higher the risk. Conversely, if we want a very safe investment, we will have a low return.

Precious metals, especially gold, break this rule somewhat, with very high returns in times of economic crisis, given their status as safe-haven assets, and relatively stable prices when there is less demand in times of economic growth. But they always maintain a long-term upward trend, which is also accompanied by high liquidity thanks to their intrinsic value.

On the other hand, the risk-return trade-off is evident when it comes to government bonds. Fixed income securities issued by governments are considered risk-free as long as we are talking about developed countries with solvent economies, and with a practically non-existent probability of defaulting on payments to creditors. Even so, they are always accompanied by relatively low or even negative yields in the case of Germany.

This low yield can be affected by inflation, if we take into account that the coupons paid on fixed income are nominal over time. Therefore, when inflation rises, their real value falls and the return on these bonds is also lower. This is a scenario in which the purchase of gold offers better inflation protection, thanks to a higher yield, while maintaining high security and liquidity. If you are interested in buying gold, 11Onze will help you do so starting next week.

 

If you want to discover the best option to protect your savings, enter Preciosos 11Onze. will help you buy at the best price the safe-haven asset par excellence: physical gold.

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The energy crisis and global economic uncertainty has boosted the purchase of precious metals such as gold and silver. The tax season starts on 6 April, so it is a good time to remember how precious metals are treated for tax purposes.

 

The central banks of several countries are increasing their gold reserves exponentially, but there has also been an increase in demand for this safe-haven asset from people who want to protect their savings in the face of an inflationary economic scenario that has no end in sight. Even so, more and more investors are including precious metals in their portfolios in order to diversify their returns.

However, before investing in gold or any other precious metal, it is important to consider what taxes are payable when buying or selling these highly valued commodities in times of crisis. Taxation can vary depending on whether you are buying physical gold or digital gold, the purity level of the metal, and other factors to consider when assessing the potential returns on your investments.

 

Investment gold bullion and gold coins

Firstly, we need to be clear that we are not talking about ordinary precious metals, such as those in jewellery or industrial sectors, but about precious metals of investment value. This distinction is important because according to the European Union decree 77/388/EEC, investment gold does not pay VAT either on purchase or sale.

The Tax Agency defines this special scheme for investment gold as “a compulsory scheme, without prejudice to the possibility of waiver for each transaction, applicable to transactions involving investment gold where such transactions are generally exempt from VAT, with partial limitation of the right to deduct”. In other words, the current VAT Law establishes certain requirements for it to be considered investment gold.

Therefore, investment gold will be exempt from paying VAT as long as it is physical gold, that is, gold bars or coins, such as the gold we offer through Preciosos 11Onze. In addition, this gold must meet minimum purity requirements: 99.5% in the case of bullion, and 80% in the case of coins. Bullion and coins that do not reach this purity will have to pay VAT at 21%, the same rate that applies to the purchase of other precious metals.

 

Income tax

Silver and other precious metals pay VAT like any other product, and each country applies its own tax rate, 21% in the case of Spain. Therefore, as investors, we have to bear in mind that these are different investments from gold, and often more speculative.

In terms of personal income tax (IRPF), any sale of gold, or any other precious metal by the taxpayer, has to be included in the tax return, and will be taxed according to the capital gains or losses generated by the operation, by the taxable savings base.

In this way, if a capital gain has been achieved with the operation, it will be necessary to reflect it taking into account the purchase price, including expenses, and the sale price, excluding expenses, with applicable rates depending on the amount.

 

If you want to discover the best option to protect your savings, enter Preciosos 11Onze. We will help you buy at the best price the safe-haven asset par excellence: physical gold.

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Market concerns about the volatility being generated by escalating tensions between Russia and the United States, combined with a subdued dollar, are driving safe-haven assets demand and pushing gold prices higher for the third day in a row.

 

The decision by Joe Biden’s administration to allow Kyiv to attack targets on Russian territory with US long-range ATACMS missiles has added fuel to the fire of the war in Ukraine and continues Washington’s escalation. This shift in US posture increases the possibility of the armed conflict spilling over the Russian-Ukrainian border.

Given that using these missiles requires the intervention of US military operatives, the Kremlin sees this decision as tantamount to a direct US entry into the conflict. The Russian government’s response merely reiterates what it had already announced a few months ago in the face of the possibility of NATO weaponry being used to attack its territory.

In this sense, following Russia’s confirmation of the first attack with these missiles against a military installation on Russian territory, Russian Foreign Minister Sergey Lavrov said that ‘it is a sign that the West is looking for an escalation’. Meanwhile, President Vladimir Putin has already approved a decree relaxing the requirements for the use of nuclear weapons.

Gold prices hit new highs

Against this backdrop, gold prices are recovering after plummeting to a three-week low in the face of Donald Trump’s decisive victory thanks to strong Treasury yields and a stronger dollar.

This precious metal’s price rose for the third consecutive day, diametrically opposed to the dollar, reaching a one-and-a-half-week high of around 2,500 euros per ounce. This appreciation has been mirrored by the value of other safe-haven assets and by the yield on 10-year US Treasuries, trading around 4.35% on Tuesday.

Although investors remain concerned about the risk of a further escalation of geopolitical tensions between Russia and the United States in Biden’s remaining two months in office, the inauguration of Donald Trump’s presidency is expected to signal the start of a possible negotiation to end the proxy war between these two powers on Ukrainian soil.

 

If you want to discover the best option to protect your savings, enter Preciosos 11Onze. We will help you buy at the best price the safe-haven asset par excellence: physical gold.

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A report by Future Market Insights indicates that Litigation Funds will grow by 9.6% annually until 2033. The sector attracts the interest of investors due to the combination of high profits, lower risk and social justice. 11Onze, through the Litigation Funding that it offers with a British provider, anticipated the market trend.

 

Almost two years ago, 11Onze reached an agreement with a British provider to offer the people of La Plaça the possibility of participating in a product that we call Litigation Funding. The vision was simple: there are thousands of stagnant cases because it is necessary to assume legal expenses that people with few resources cannot afford. Would it be possible to finance these cases against the banks and administrations that have abused these citizens? Would it be possible, in addition to doing justice, to make money? The answer is yes, the product works and generates profits of between 9% and 11%. And it is not just 11Onze that claims it, but rather clients who have been generous enough to share their experience with La Plaça, such as Salvador, Dolors and Carme. All of them have participated, perhaps unwittingly, in what is currently considered the cutting edge of the investment sector.

 

The fashion sector

This is confirmed by a report by the American company Future Market Insights, which in an extensive work documents the evolution and prospects of litigation funds. In the report, they explain that “the market is expanding due to the increasing need for litigation funding from plaintiffs. This is driven by the increase in legal costs, as well as the desire of people and organizations to use litigation investment as a method of making money.” In this sense, they predict that globally, the litigation funding sector will grow at a rate of 9.6% annually until 2033. This, in terms of volume of money, means going from 17.16 billion dollars in 2023 to 43.048 billion ten years later.

Growth during these years will be supported, foreseeably, by a favourable regulatory framework that is facilitating the creation of firms specialized in litigation financing. In addition, large law firms are focusing on detecting cases that may mean quick victories but that, until now, could not be successful due to lack of financing. Currently, in the case of Litigation Funding that 11Onze Recommends, the percentage of victories is above 90% and in no case is the initial capital lost, because it is covered by insurance.

 

Banks and large investment funds

High returns and low risk have also attracted the big players in the financial world, and several large banks and investment funds are planning to enter the litigation funding sector. In this regard, at 11Onze we can only advise that investors, when receiving a proposal, carefully evaluate the risks and whether the proposal fits with their values. For example, according to the report, there will be a significant increase in litigation funding “in the media and entertainment sector, due to an increase in trademark and copyright infringement claims across the industry. In addition, the growing number of medical malpractice claims is expected to increase demand for litigation funding in the healthcare sector.” Which lawsuits the investor wants to participate in and what percentage of victories they guarantee is a matter that must be carefully thought out before participating.

 

The Litigation Funding that 11Onze Recommends

Currently, the product that 11Onze Recommends through its British provider is focused on lawsuits for bank and public administration abuses, in the latter case very focused on housing issues.

Fund lawsuits against banks. Get justice and returns on your savings above inflation thanks to the compensation the banks will have to pay. All the information about Litigation Funding can be found at 11Onze Recommends.

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With prices soaring to record highs, the Chinese are turning to gold to protect their savings in a context of economic uncertainty and real estate crisis. As demand for gold jewellery plummets, sales of bullion and coins are soaring.

 

Three years after the collapse of Evergrande, China’s property crisis continues to put pressure on a central government facing a worrying economic slowdown. Some analysts are sceptical about the effectiveness of the central government’s proposed measures to boost homebuyer confidence and overall consumption.

Haibin Zhu, chief China economist at JPMorgan, told CNBC in early September that ‘the property market meltdown is not over yet’, adding that China’s ailing housing market will continue to weaken as the government’s series of stimulus and support measures have not been ‘satisfactory’ in shoring up the sector.

Against this economic backdrop, companies have cut wages, young university students are finding it difficult to enter the labour market and Chinese consumers, already prone to saving, have become even more frugal. This has led to a strong demand for gold from Chinese households, who, despite rising prices, continue to regard the golden metal as the best safe-haven asset.

 

From jewellery to bullion and gold coins

With gold prices having risen for almost two years now – since the beginning of 2024 alone they have already appreciated by 23% – and continuing to hit record highs, it is not surprising that jewellery sales have plummeted globally. In China, jewellery purchases fell 35% year-on-year in the second half of the year.

This is the second-weakest quarter for jewellery demand since 2020, when it was hit hard by the Covid-19 health pandemic. Even so, Chinese consumers and investors have not stopped buying gold, but have shifted away from jewellery to bullion and coins, sales of which are up 46%, according to data from the China Gold Association.

It is clear that Chinese households have turned en masse to buying gold because they have lost confidence in traditional investments such as real estate or stocks. It remains to be seen how the property market and the Chinese economy will evolve, but it is clear that the Chinese population’s demand for gold is far from a crisis.

 

To discover the best option to protect your savings, go to Preciosos 11Onze. We will help you buy the ultimate safe-haven asset, physical gold, at the best price.

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Gold has risen 23% since the beginning of 2024 and its price remains at an all-time high of around 2,260 euros. Geopolitical tensions, central bank purchases and a weak dollar reaffirm gold as the safe-haven asset par excellence in times of economic uncertainty.

 

Gold prices experienced a notable rally on Tuesday on optimism that the Federal Reserve will cut interest rates this month and remain around 2,260 euros per ounce, as investors’ attention now turns to the US payrolls report due on Friday.

Also, the persistent demand for gold by central banks – they purchased more than 1,000 tonnes of gold last year alone, setting a new record – the weak dollar and global geopolitical tensions are the main factors that have kept the value of the precious metal at record highs.

This has been reflected in the significant price increase of 23% since the beginning of the year, outperforming stock market indices such as the S&P 500, which has risen by around 17%, and doubled its value in the last five years.

Outlook for the coming months

The financial market narrative remains unchanged, with optimism all around despite the occasional fluctuations in gold prices. The weak dollar, possible rate cuts and low US Treasury yields – 10-year bond yields have fallen 25 basis points in the last month – create a favourable environment for continued demand for gold.

Goldman Sachs said in its latest report on Tuesday that gold has the greatest upside potential in the near term, given its role as a favoured hedge against risk. Conversely, weak demand from China has led to a ‘more selective and less optimistic’ outlook on other commodities.

The Fed’s impending rate cuts are poised to drive Western capital back into the gold market, a component largely absent from the strong gold rally seen over the past two years,’ the Wall Street bank stated in its “Go for Gold” note. That said, it adjusted its gold price forecast to $2,700 (€2,444) in early 2025 from the previous forecast of late 2024, citing a price-sensitive Chinese market.

On the other hand, sustained demand from central banks around the world that bought a record 483 tonnes of gold in the first half of 2024, pushing the asset to an all-time high, suggests that the precious metal will maintain its safe-haven appeal in the months ahead.

To discover the best option to protect your savings, go to Preciosos 11Onze. We will help you buy the ultimate safe-haven asset, physical gold, at the best price.

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