More US troops to arrive in Iran

In this month's Editorial, we write about how central banks especially in the EM are increasing their gold holdings, as a response to rising geopolitical and market uncertainty. Not only are central banks scaling up their gold reserves, but they are also diversifying the custodians and repatriating some of the physical gold.

Few central bankers in the West are explicitly saying they are diversifying a US-related risk, and the Federal Reserve has kept its position as the fourth most trusted custodian for gold. That said, last week, when central bankers met in Italy for the London Bullion Markets Association conference, Gioia Cellai, deputy director at Banca d'Italia, said: "Gold is something physical that you can store in your vaults, and so it's perceived somehow less exposed to sanctions or friends becoming enemies".

In our Middle East section, we write about the escalating warfare between Saudi Arabia and Yemeni Houthis. The US, on the other front, has clearly abstained from responding forcefully to Iran's provocations in the past month. According to media reports, Trump's advisors have in recent months made five proposals for major operations against either Iran or the Houthis, but each time the President has vetoed. We keep a close on eye whether the US administration chooses to re-escalate after the mid-terms.

In our Russia-Ukraine section, we flag the recent media reports that Ukraine has been left without US intelligence two nights in a row. During those two days, it has been able to intercept only four out of 44 in coming Russian missiles. We also write about Ukraine's successful campaign against Russian refineries and note that some of the damage will take several months, if not longer, to repair. The US is pushing for an energy ceasefire, and we will keep a close eye on whether an actual ceasefire can be reached.

In our China section, we discuss the easing in trade tensions between the EU and China. Going forward, we keep an eye on this week's EU leaders summit, the two remaining Xi-Trump meetings this year in November and December, as well as US weapons sales to Taiwan.

In under the radar section, we again flag several interesting developments including the upcoming second round in Brazil presidential election, where Flávio Bolsonaro is the current front runner. We also write about the outcome from the BRICS summit, as well as about the upcoming Russia-Africa summit. In the broader Horn of Africa region, tensions are on the rise, with Ethiopia accusing Sudan, Eritrea and Egypt for supporting a domestic rebel militant group.

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