“Households in India may have piled up around 24,000-25,000 tonnes of gold, remaining the world’s largest holders of the precious metal, Somasundaram PR, managing director (India) of the London-headquartered World Gold Council (WGC), has told FE. At Friday’s international price, the value of the holdings (25,000 tonne) would be as much as $1,135 billion, or equivalent of more than 40% of India’s nominal gross domestic product (GDP) in FY19.”
USAGOLD note: To give you an idea just how much gold the people of India own in the overall scheme of things, the total amount of gold held by governments and central banks globally is 33,976 tonnes, according to World Gold Council statistics.
Gold suitably undervalued
“The price of a fine suit of men’s clothes,” says the U.S. Geological Survey, “can be used to show anyone who is not familiar with the price history of gold just how very cheap gold is today. With an ounce of gold, a man could buy a fine suit of clothes in the time of Shakespeare, in that of Beethoven and Jefferson, and in the depression of the 1930s.”
So where do we stand in 2019 with respect to The Quality Man’s Attire-Gold Ratio? At Brooks Brothers a top quality, off-the-rack suit ranges between $2625 and $3122 without a vest. Brooks Brothers does carry a less expensive suit at about $1250, but the ratio requires a top (not lower or middle) quality man’s suit. On London’s Saville Row – the standard for quality men’s attire – a hand-tailored men’s suit ranges in price from £3500 ($4620) at Huntsman to £4950 ($6534) at Kilgour (as published in Gentleman’s Quarterly). By any of those measures, gold at $1300 per ounce is suitably undervalued.
“Absolutely. As long as we have a financial system, we will have financial crises. The only question is how often and how severe. Personally, I think a crisis is likely to happen sooner rather than later because of the large number of possible crisis triggers that are currently being squeezed. . . . Fortunately, because of improved capital, liquidity and risk management, the next financial crisis is unlikely to result in a banking crisis. But it could still easily result in sufficiently deep losses across a sufficiently broad range of assets to trigger an extraordinarily painful recession, or worse. The likelihood that the US has seen its last depression is about as high as the likelihood that it has seen its last war. Just saying.”
USAGOLD note: In this fascinating peak behind the curtain, Mike Silva tells the inside story of the 2008 financial crisis from the perspective of someone who, as Tim Geithner’s chief of staff at the New York Fed, was at the policy-making epicenter during the breakdown. Silva delivered his remarks in a speech before the London Bullion Marketing Association in October 2018.
Image by Benji the Pen [CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0)], from Wikimedia Commons [Edited]
Repost from 2-13-2019
Bullion Star/Ronan Manly
“While the Chinese and Indian populations are well known for their insatiable appetite for importing, buying and hoarding physical gold, there is one market in the West that does likewise but which flies under the radar slightly, garnering less attention than China and India. That gold market is Germany. Although German citizens are known for their fondness for holding gold, the vast size of the German population’s gold holdings was clarified recently in a newly published survey commissioned by Reisebank, a bank active in the German precious metals market.
The survey, conducted by the Research Center for Financial Services (CFIN) on behalf of Reisebank, found that German adults currently own a staggering 8918 tonnes of gold, worth about € 330 billion at current Euro gold prices. Note, this figure is gold held by private citizens in Germany and does not include the gold reserves of the German central bank, the Bundesbank, which amount to an additional 3370 tonnes.”
USAGOLD note 1: When push comes to shove, those who own the gold make the rules.
Repost from 4-29-2019
“What is important though is that the central banks are highly price sensitive and do not chase the market. They reduce their purchases when the gold price rise and, conversely, increase their holdings when the gold price falls. The result is that they effectively create a floor for the gold price as they act as buyer of last resort.”
USAGOLD note: DeClerk backs up that premise with a simple but effective chart that shows central banks demand increasing on dips in the gold price.
Repost from 5-13-2019
“I believe that this was just the beginning. In the end, it will be very tempting for the US to get rid of its debts by devaluing its own currency. Many creditors are abroad, especially central banks. If the non-American central banks notice the loss of the value of their assets, they will buy much more gold. Then the historically unusual and economically fatal situation where central banks hold the bonds of mainly one country will finally come to an end. This is one of the reasons I have an optimistic view of gold’s performance in the months and years to come. Also, given the global economic and political landscape, that is troubling to say the least, gold’s appeal is bound to rise and not just among institutional investors.”
USAGOLD note: An interesting, in-depth interview of one of the individuals behind Germany’s gold repatriation program.
Repost from 5-15-2019
(USAGOLD – 5/20/2019) – Gold is level this morning still trying to make up its mind about the latest volleys fired between the two sides in the US-China trade dispute. It is trading early in the US session at $1276.50 – its lowest level since early May. Silver has added modestly to its price – up 5¢ at $14.43. The yellow metal ended last week in a slump that most analysts traced to a sharp drop in China’s yuan. Questions abound about China’s willingness to defend its currency. Like gold, it is trading sideways this morning. The stand-out market this morning is stocks – down 172 as this posted.
Over the weekend Bloomberg asked Granite Shares’ Will Rhynd a question on the mind of a good many investors. Why has gold failed to rally in the face of the present uncertainty? “The trade talks,” he responded, “and the kind of breakdown in trade talks at the moment is negative in the sense that it is manifesting itself in a more stronger dollar. The late cycle trade right now is still positive for gold and we see investors as positioning themselves that way – being more defensive and being more defensive typically means an allocation to gold.” He went on to say that a physical gold ETF fund his firm offers has increased by well over one-third this year as a result of investors “being more defensive, adding gold to the portfolio – people looking for uncorrelated asset classes. Since the beginning of the year, we have seen a big uptick in gold interest.”
Quote of the Day
“I’m not opposed to a new Bretton Woods conference, and if it takes place at Mar-a-Lago, I’m fine with that. But anything the U.S. does because we print the international reserve currency, unilateral action would almost instantly be accommodated by other countries. In terms of gold being involved, some people may think of that as a throwback, but I see it as a sophisticated, forward-looking approach because gold is neutral and it’s universal. It’s a well-accepted monetary surrogate that transcends borders and time. If you look at the foreign reserves of the most important countries, they keep them mostly in gold. I don’t want to read too much into it, but it proves that gold is not some barbarous relic.” – Dr. Judy Shelton, economic advisor to President Donald Trump (said to be on the inside track for appointment to the Federal Reserve’s Board of Governors)
Chart of the Day
Chart courtesy of TradingEconomics.com
Chart note: The Trump administration introduced tariffs on selected Chinese imports in March 2018 and the China yuan immediately turned south. After stabilizing somewhat beginning in late 2018, it again dropped sharply beginning in April 2019 as talk began to break down. Since the March 2018 interim peak, the yuan has dropped about 10%. Since April 2019, it has fallen about 3.5%. There is a direct correlation between the imposition of tariffs and depreciation of the yuan. The outstanding question at this point in time is if Chinese authorities will step back and watch or take measures to halt the decline.
“Donald Trump is betting that the US is better placed than China to withstand the pain of a prolonged stand-off over trade. But attitudes to Washington are hardening across the bureaucracy in Beijing.”
USAGOLD note: This article begins with some Main Street reactions to the trade war. A hardware store owner in Virginia says on-the-shelf tariff price increases are not 2-3% but “5, 10 per cent-plus hikes on things.” Another concern raised in this editorial is that the standoff “will deliver a blow to financial market confidence.” Major retailers have come public in recent days with warnings about upcoming price increases, including WalMart and Macy’s.
“The trade war between the U.S. and China is not expected to have a big impact on your favorite commodity—unless you happen to be a soybean farmer. ‘This is going to go on longer than people think, but there’s no reason to be doomsday about it,’ says Craig Turner, senior commodities broker at Daniels Trading, a Chicago-based futures brokerage firm. ‘You can be worried—there’s nothing wrong with being a little bit worried—but I wouldn’t panic.'”
USAGOLD note: Though the plight of the soybean farmer is the focus of this article, it ends with a nod in the direction of the precious metals. Gold, it says, may be the one “winning commodity” in the trade war because of its dual role as inflation hedge and general safe haven asset.
“It is this most foundational understanding of currency that keeps our economy humming, our physical prosperity growing and our society stable. The TRUST backing the dollar, euro, yen, etc. is essential to our financial, physical and psychological welfare. Let’s explore why we should not assume that TRUST is a permanent condition.”
USAGOLD note: Liebowitz offers interesting insights on the value of the dollar and whether or not trust in that value is well-placed.
“Greece is in the vanguard of this trend, attracting fair-weather, shallow, speculative trades, while patient investment in its economic recovery is nowhere to be seen. After 2008, Greece came to symbolize global capitalism’s failure to balance credit and trade flows. Today, as the global mismatch between economic reality and financial returns grows, there is clear danger that, once again, the country is foreshadowing a new phase of the global crisis. When vultures grow fat on a corpse, they do not revive it.”
USAGOLD note: Varoufakis, who garnered much attention as Greece’s Finance Minister during its financial breakdown, focuses in this essay on financial market speculation in low-quality debt – public and private – and says that Greece once again is the ‘canary in the global gold mine.’
Related: Fed warns leveraged lending could exacerbate a downturn/Financial Times/Kiran Stacey/5-6-2019
“Increasingly, it appears as if the respite from Q4 global market instability has about run its course. As an economy – from governments to corporations to households – I can’t imagine a more poorly prepared system for the gathering storm. I know: fundamentals are “sound” and the banking system is ‘well capitalized.’ Besides, there’s the Quadruple Puts – a deeply entrenched market misperception that really concerns me. Complacency is pervasive – epically so. Ignore fundamental developments, while placing faith in the power of politicians and central bankers (and corporations forever enjoying access to cheap finance to fund buybacks). Such a backdrop creates extraordinary risk for an abrupt change in perceptions and resulting crisis of confidence – in policymakers and the markets.”
USAGOLD note: Noland discusses strategies China might deploy with respect to the yuan citing a Reuters report in which Chinese sources say the PBOC will not allow it to break the 7 level. Since most of gold’s downside the past week was the result of yuan weakness a strong response from the PBOC is likely to be received positively. Another positive in all of this is that the demand for gold in China is likely to be mobilized as a result as everyone from commercial banks and institutions and private individuals move to protect their assets against yuan depreciation.
“What becomes much more apparent is that bear markets tend to destroy most or all of the previous advance and has done so repeatedly throughout history. Importantly, what was not being discussed between the advisor and his 60-something client was simply the risk of ‘time.’ There are many financial advisors, commentators, experts, and social media gurus who have never actually ‘been invested’ during a real ‘bear market.’ While the ‘theory of ‘buy and hold’ sounds good, kind of like MMT, in practice it is an entirely different issue. The emotional stress of loss leads to selling even by the most ‘die hard”’of individuals. The combined destruction of capital and the loss of time is the biggest issue when it comes to individuals meeting their retirement goals.”
USAGOLD note: There are two principal approaches to the problem Mr. Roberts so persuasively exposes. One does not necessarily preclude the other. The first is to find a good guide to help you paddle through choppy waters. The second is to diversify before the water begins to even stir. With respect to hedging stock market exposure, the focus of the essay linked above, a good approach and the one that has gained considerable purchase in these uncertain times is to own an uncorrelated asset – a course of action that inevitably leads the seeker of wisdom to gold’s door. . . . The charts alone are worth the visit.
Financial Times/James Politi and Jude Webber/5-18-2019
“Donald Trump is easing trade tensions with US allies, bowing to mounting domestic pressure to rein in commercial conflicts across the world and focus on an escalating tariff battle with China.”
USAGOLD note: Should we call it the ‘US-China Trade War’ or Trade War 1 (TW1)? The White House, Financial Times reports, is only tabling the trade conflicts with Mexico, Canada, Europe and Japan until a later date.
“Negotiations between the U.S. and China appear to have stalled as both sides dig in after disagreements earlier this month. Scheduling for the next round of negotiations is ‘in flux’ because it is unclear what the two sides would negotiate, two sources briefed on the status of the talks said. China has not signaled it is willing to revisit past promises on which it reneged earlier this month, despite showing up for talks in Washington last week.”
USAGOLD note: This latest turn of the screw will cause a great deal of anxiety over the weekend that will likely flow into the open for Asian markets late Sunday. . . . .
“It’s been a while since we updated on the daily doings of the ‘world-renowned commodity guru’ Dennis Gartman for the simple reason that just like the algos, the mom and pops and virtually all hedge funds, Gartman too had no idea what is really going on in a market in which everyone is selling (there is now $135 billion in equity fund redemptions YTD) yet stocks keep rising higher.”
USAGOLD note: Well said. . .
“This is the year that mounting hammer blows to the Western alliance system and the edifice of global governance threaten to bring the old order tumbling down. . .Pax Americana is unravelling. The transatlantic concord underpinning the West since the Fifties is dying. Nato, the G7, the G20, the WTO and the EU are all in varying degrees of crisis. Vladimir Putin’s Russia has an open goal. ‘Every single one of these is trending negatively. And most in a way that hasn’t been in evidence since the Second World War,’ it said.”
USAGOLD note: Joseph Schumpeter referred to the process Evans-Pritchard outlines as ‘creative destruction.’ In replacing the old with the new, though, businesses and financial markets are going to be hurt – whole economies potentially tossed against the rocks. One cannot have read yesterday’s reports of the $1 trillion in possible capital flight from London without becoming concerned.
Repost from 1-8-2019
“But with Europe stumbling from crisis to crisis, the German public has grown uneasy about keeping the gold abroad. Some even argue the world’s second biggest bullion reserve may be needed to back a new deutschmark, should the euro zone break up.” – Reuters, 2-9-2017
“Germany has a stronger relationship with gold than most nations. The country’s experience with hyperinflation between 1919 and 1923, during the years of the Weimar Republic, is ingrained in the national consciousness. Gold, above all, stands for stability” – Financial Times, 11-10-2017
Germany this year (2017) completed its scheduled transfer of national gold reserves from the New York Fed and the Bank of France. Germany will now leave 1236 tonnes at the New York Fed and another 432 tonnes in London. The remainder of its 3378-tonne national holding will be stored in Frankfurt. The repatriation transfers to Frankfurt were completed three years ahead of schedule.
With respect to the gold left at the Fed, Bundesbank’s Carl-Ludwig Thiele told reporters: “We have a lot of discussions about (U.S. President Donald) Trump, regarding implications on monetary policy, macroeconomics, etc., but we trust the central bank of the U.S.”
Thiele’s confidence in the Federal Reserve brings to mind an old story about Germany’s relationship with the Federal Reserve and the storage of its gold reserves. When Hjalmar Schacht, head of Germany’s central bank in the 1920s, visited the New York Fed he asked to see Germany’s gold stored in its vaults.
“Strong**,” wrote Schacht in a 1955 autobiography, “was proud to be able to show us the vaults which were situated in the deepest cellar of the building and remarked: ‘Now, Herr Schacht, you shall see where the Reichsbank gold is kept.’ ” Storage staff went off to retrieve the gold. “At length,” Schacht goes on, “we were told: ‘Mr. Strong, we can’t find the Reichsbank gold.’ ” To which Schacht replied: “Never mind; I believe you when you say the gold is there. Even if it weren’t you are good for its replacement. ”One need presume that nearly 100 years later, the level of trust conveyed by Schacht remains in place.
It is unlikely that Germany would depart the euro anytime soon and back a new Deutschmark with gold. Having an asset set aside, though, that is detached from erratic national currencies in this day and age is a wise move for the prudent nation-state – just as it is for the prudent private investor.
** New York Fed president at the time, Benjamin Strong
Repost from 2/10/2017, updated October, 2018. The Financial Times article linked at the top of the page tells the fascinating inside story of Germany’s gold repatriation.
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(USAGOLD – 5/17/2019) – Gold is off marginally this morning as tensions escalated between the US and China. Yesterday, gold plummeted sharply along with China’s currency. Today the drop has been more subdued even as the yuan continued its free fall in the offshore market – a situation that signals some investors might be looking to safe havens as a worthy alternative at this juncture. Bonds – the other primary safe haven destination – are also higher this morning. The yellow metal is down $1.50 in the early going at $1284. Silver is down 7¢ at $14.48.
In a Kitco interview yesterday, Scotiabank’s Nicky Shiels said that gold has stuck in a four year lull but that 2019 might the year it breaks out of its narrow range. “We feel we are in a good spot for the next commodity cycle,” he said. “Gold is perking up this year, trying to break out of its four-year cycle. It is viewed generally as a hedge to the dollar alongside to being a hedge to inflationary policies and geopolitical risks. I believe gold has a chance of reaching $1,400 this year.”
Quote of the Day
“[S]ome of the biggest players in the gold sector are warning we’ve seen peak gold production. Also, the biggest pools of money on the planet – central banks – are loading up on gold. Dwindling supply met with tons of demand means higher prices. Historically, gold has been a fantastic leading indicator of central bank policy… The metal ran from under $1,200 an ounce to nearly $1,300 an ounce prior to the Fed’s reversal in January. And if it runs higher from here, which we fully expect, it means all hell is about to break loose. I’d recommend adding to your position while you still can.” – Simon Black, Sovereign Man
Chart of the Day
Chart note: Up until the “double oughts,” the manual on gold read that it performed well under inflationary and deflationary circumstances, but not much else. However, as the decade of asset bubbles, financial institution failures, and global systemic and sovereign debt risk progressed, gold marched to higher ground one year after another. As events unfolded, it became increasingly clear that the metal was capable of delivering the goods under disinflationary circumstances as well. The fact of the matter is that, during the 2000s even as the inflation rate hovered in the low single digits (See chart, green area], gold managed to rise from just under $300 per ounce in the early 2000s to just over $1800 per ounce by 2011 — a gain of nearly 650%. Since then, gold has taken a breather. As this essay is written, it is trading in the $1285 per ounce range — still up over 425% in the new century.
“‘Excise taxes,’ [said Greenspan] when they are imposed are the same as any tax – they withdraw purchasing power from an economy.’ ‘So if you have two industrial giants, both taking on severe levels of that type of analysis, in other words having a great deal of loss of purchasing power, it’s not good for either one… there is a winner in the fight. But both sides lose. So the winner is the one who loses the least.'”
USAGOLD note: Greenspan once again cuts to the chase. The problem presented by the loss of purchasing power is that consumers and businesses step up purchases in order to preserve capital which drives prices even higher. That is how runaway inflation is ignited in a previously placid economy.
“The go-ahead from the U.S. Commodity Futures Trading Commission, announced Wednesday, comes after ICE announced in February that it planned to impose a 3-millisecond trading delay on gold and silver contracts. The pause would be the first-ever speed bump for futures, showing that an idea popularized in Michael Lewis’s 2014 book ‘Flash Boys’ to rein in high-frequency traders is gaining more adherents.”
USAGOLD note: Interesting that ICE would choose gold and silver as the two streets in which to install the speed bump. The CFTC says that the speed bumps “have the potential to significantly impact futures’ markets function and quality” and that it would promote more trading through “slowing down high-speed traders engaged in latency arbitrage.” The CFTC, it would seem, is handing high-speed trading a ticket. Hopefully the net effect will be something of a return to normalcy as the advantage of high-speed trading is throttled.
“The only way for Millennials to pay for Boomers’ Social Security and Medicare would be for the latter to confiscate 90% of the former’s paychecks. That won’t happen, so something else has to, most likely massive benefit cuts via hidden inflation.”
USAGOLD note: Rubino says the demographic problems of the future will lead to a “purposeful inflation” and “a massive shift of capital out of financial assets like government bonds that depend for their value on the stability of the underlying currency, and into real assets like oil wells, farmland and precious metals which governments can’t create with a mouse click.” The article is worth a read especially for those who suspect demographics might be the root cause of our most intractable economic problems.
Financial Times/Sam Fleming and Alistair Gray/5-16-2019
“Donald Trump has been sounding supremely confident that US consumers will emerge unscathed from his trade war, but economists fear households are already starting to be hit by earlier rounds of tariffs and will face a mounting burden as hostilities escalate.”
USAGOLD note: Several retailers including WalMart have publicly warned their customers that higher prices are coming the result of increased tariffs on China.
“Except for a small net purchase in February, China has now sold Treasuries every month since September. A fear in the US is that China could ramp up its sales of Treasuries in an attempt to disrupt the market and put upward pressure on US interest rates, in effect raising borrowing costs for Washington.”
USAGOLD note: Financial Times points out that the yuan remained flat during March when the liquidations were conducted hinting at a connection with trade negotiations. FT quotes Deutche Bank’s Torsten Slok as saying “Normally the answer to why this has happened has been very similar — it’s been the exchange rate. This time the number is more surprising. There are a lot of open questions.” There is another question not covered in the articles we have read on this subject: Will sales by China prompt sales from other nation states as part of the de-dollarization trend? At the moment, foreign invetors hold over $6 trillion in U.S. debt paper, as shown in the chart below.
Gold – Past, present and future
Dr. Moneywise says: Gold has a past. I suspect it has a future. We live in a time when currencies and financial markets have become political enterprises – creations of the world’s governments and central banks. Since we have never seen times like these, when so much depends on the monetary largesse of the policy-makers, no one really knows where the future might lead us. Uncertainty reigns and, when that is the case, history teaches us that gold demand rises proportionally and at times impressively so.
“Why is it,” asks Nathan Lewis in a Forbes magazine article, “that the collective intelligence (let’s be generous) of today’s central bankers, and indeed all the central bankers since 1971, cannot outperform a yellow rock? This probably strikes some as bizarre, but it has always been thus. Way back in 1928, in a book called The Intelligent Woman’s Guide to Socialism and Capitalism, George Bernard Shaw declared: “You have to choose … between trusting to the natural stability of gold and the natural stability of the honesty and intelligence of the members of the Government. And, with due respect for these gentlemen, I advise you, as long as the Capitalist system lasts, to vote for gold.”
Whether or not gold is the best basis for money may be a moot point. On the other hand, whether or not private investors should own it because the money is not gold-backed remains a vital question. The gift of gold – the one passed from generation to generation from ancient times to present – is the protection it offers against a profligate government, an unpredictable economy, unstable financial markets and a myriad of additional threats to private wealth. The gift of gold, in short, is peace of mind.
“‘For much of 2018, investors tended to focus on other, higher-yielding asset classes [than gold],’ says a note from specialist analysts Metals Focus, ‘but we do expect this position to gradually change, especially during the latter part of 2019…[as] a slowdown in the US economy will encourage the Fed to adopt a far more dovish stance towards its interest rate policy.’ Forecasting that ‘a bull market in gold [will] emerge from late 2019 onwards,’ Metals Focus think that uptrend will then ‘remain in place for two to three years.'”
USAGOLD note (12-19-2019): Adrian Ash passes along another positive reading for the yellow metal for 2019, this time from London’s Metals Focus.
USAGOLD note (3-15-2019): This prediction from Metals Focus in December appears to have been prescient and unfolding on a timeline much sooner than originally anticipated. On December 19, the date Metals Focus released their study, gold was trading in the $1240 range. It reached $1340 February 19th, two months later, and is hovering now in the $1300 range.
Repost from 12-19-2018
“We’re getting into the end-game stage,” said Myron Brilliant, executive vice-president for international affairs at the US Chamber of Commerce. “Ninety per cent of the deal is done, but the last 10 per cent is the hardest part, it’s the trickiest part and it will require trade-offs on both sides,” he told reporters on Tuesday.”
USAGOLD note: The good news is that both sides seem to want to finalize a deal as they round the final turn and head into the backstretch, according to this FT report. The bad news is that the final 10% Brilliant references, could be a deal killer. We hesitate to point out that it has been on the table for months. . . . . . .Market strategist Clif Droke has this to say about the potential effect of a trade deal on the price of gold: “. . .[T]here is also a growing sense among some analysts that if a trade deal is soon reached, it would actually benefit gold. This belief is based on the assumption that a trade deal would likely push the U.S. dollar’s value lower, in turn boosting gold’s price due to its inverse correlation to the dollar.” We would add that a trade deal would likely increase demand for commodities in general – a development that could spill over to the gold and silver markets.
Repost from 4-3-2019 (Hard to believe that this where we were roughly a month and a half ago.)
(USAGOLD – 5-16-2019) – We can’t be certain at this juncture, but it looks like this morning’s sell-off in gold is related to weakness in China’s yuan. An article in the South China Morning Post today focuses on the 2% drop in China’s currency over the past two days* and states that a “further slide of the yuan below 7.00 to the dollar could counter a new 25 per cent tariff on US$300 billion of Chinese goods exported to the US.” It then quotes Capital Economics’ senior China economist Julian Evans-Pritchard as saying that “if tariffs were ultimately implemented on all US imports from China, Beijing would have less to gain from supporting the yuan than allowing the market to weaken it.”
Along these lines, Deutsche Bank is out with a report this morning (featured at ZeroHedge) saying that “Asia is the region we expect to suffer most from the renewed global headwinds. We argue that policymakers in China are now going to be more accepting of USD/CNY appreciation through 7 . . .” That kind of thinking, we believe, is what probably drove the dollar sharply higher this morning and gold sharply lower. If something else surfaces, we will post it.
* The 2% drop SCMP cites appears closer to 2.5%, but occurring since May 6 – not the past two days.
Chart courtesy of TradingEconomics.com