DMR–Gold off this morning, not much in the way of news

Gold is off another $2.50 this morning at $1256.00 in a minor continuation of yesterday’s downtrend.  Silver is down 8¢ at $16.21.  Nothing new has surfaced in the way of market-altering news.  Gold seems to be looking for direction in early trading. We will keep the DMR short today as there isn’t much to report, and point you immediately below for a couple quick, but interesting reads.

Quote of the Day
“Reflect on what happens when a terrible winter blizzard strikes. You hear the weather warning but probably fail to act on it. The sky darkens. Then the storm hits with full fury, and the air is a howling whiteness. One by one, your links to the machine age break down. Electricity flickers out, cutting off the TV. Batteries fade, cutting off the radio. Phones go dead. Roads become impassible, and cars get stuck. Food supplies dwindle. Day to day vestiges of modern civilization – bank machines, mutual funds, mass retailers, computers, satellites, airplanes, governments – all recede into irrelevance. Picture yourself and your loved ones in the midst of a howling blizzard that lasts several years. Think about what you would need, who could help you, and why your fate might matter to anybody other than yourself. That is how to plan for a saecular winter. Don’t think you can escape the Fourth Turning. History warns that a Crisis will reshape the basic social and economic environment that you now take for granted.” – William Strauss & Neil Howe, The Fourth Turning [1997]

Charts[s] of the Day

Chart courtesy of TradingEconomics.com

Chart note: Though China might be tempted to choose devaluation over selling U.S. debt as a tactic in the trade war, as Goldman Sach’s economists suggested yesterday, it creates other problems for the country that it has tried to avoid in the past – most notably capital flight.  The fact of the matter is that China has chosen to do just the opposite since early 2014: It has sold U.S. debt and tried to keep the yuan in a tight band against the U.S. dollar. China’s foreign exchange reserves as a result went from nearly $4 trillion to just above $3 trillion.  Meanwhile, the yuan has traded in a narrow channel between 14¢ and 16¢.  Noted gold analyst, Martin Murenbeeld, in fact, recently suggested that the trade war would inevitably force the U.S. to devalue the dollar. (Please scroll below) Also, the Wall Street Journal reports this morning that today “China’s central bank appeared to intervene to stem the yuan’s decline.”

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