(USAGOLD – 5/29/2024) Gold prices are slightly down in early trading on the strength of the U.S. dollar and Treasury yields, profit-taking by investors, and anticipation of key U.S. inflation data. Gold is trading at $2345.52, down $15.79. Silver is trading at $31.89, down 21 cents. The recent surge in gold prices, driven primarily by Chinese demand, has now extended to copper and silver. The Chinese market has seen a significant increase in trading volumes and open long positions in gold futures, spurred by the underperformance of the stock market and a sharp decline in property prices. This gold rush is seen as a hedge against potential currency devaluation. Concurrently, copper prices have soared despite high inventory levels, as China stockpiles the metal, removing physical stocks from the market and complicating supply chains, particularly in the West. This has led to a short squeeze, pushing copper prices higher. Similarly, silver prices have reached new highs, with trading volumes peaking on the Shanghai Futures Exchange, prompting Chinese authorities to raise margin levels to curb speculation. This trend of accumulating tangible metals coincides with China’s reduction of its US Treasury holdings, which have decreased by $76 billion over three months, reflecting a strategic shift away from dollar assets.
