Gold rise cause

Discussion in 'Gold' started by Peter, Aug 12, 2019.

  1. Peter

    Peter Well-Known Member

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    Gold futures spiked higher last week after consolidating for six weeks. Some of the move was fueled by a weaker U.S. Dollar and a steep drop in global equity markets, but most of the rally was fueled by China allowing the yuan to dip below 7 yuan per dollar and a plunge in global bond yields that raised concerns over a worldwide recession.

    For the week, December Comex goldsettled at $1508.50, up $51.00 or +3.50%.

    Some people like to call it safe-haven buying, but I prefer to trade gold using its relationship with interest rates as my guide. Who knows what safe-haven buying even means. I just know that when rates go down, gold tends to go up.

    Early last week, China shocked the markets when it allowed its currency to drop below 7 yuan per dollar. Since it was likely in retaliation to the new tariffs announced by President Trump on August 1, I think it was China’s way of saying, “We have weapons too.” China would like nothing more than to cause a recession in the U.S. if it would mean a Democrat beats Trump in the 2020 elections. They feel a Democrat would be easier to deal with.
    https://www.fxempire.com/forecasts/...y-attention-to-yuan-global-bond-yields-592561
     
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  2. stackmans

    stackmans Member

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    the trouble in Hong Kong has also contributed to the this weeks gold spike.
     
  3. Slimey

    Slimey Active Member

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    Gold has risen because I don't have any money to buy it. Give it 3 days after I am flush with cash and make a purchase......then........
     
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  4. Peter

    Peter Well-Known Member

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    If China intervenes, it could lead to a major market selloff, Thin added. “Any heavy-handed efforts by the mainland to crack down on the Hong Kong protests will directly feed into investor concerns … That in turn will call into question the entire rule of law in Hong Kong and markets will tank. Once lost, trust and credibility may never be regained.”

    INTL FCStone highlighted last week that if the Hong Kong situation deteriorates gold could hit $1,600 an ounce.

    “We have an outside chance of prices getting to $1,600 this month, but predicated this on perhaps China moving aggressively against protestors in Hong Kong, something that looks like an increasing possibility given the chaos that has engulfed the island,” INTL FCStone Independent Commodity Consultant Edward Meir said in his August report.
    Kitco
     
  5. TreasureHunter

    TreasureHunter Well-Known Member

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    So, the casino-markets/speculation has pushed gold so high?
     
  6. sgbuyer

    sgbuyer Well-Known Member Silver Stacker

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    HK is only the tip of the iceberg. The whole of China isn't stable. The property bubble isn't unique to HK. All major Chinese cities are in a bubble situation and 1st tier cities worst than HK.

    If Xi succeeds (wins and retains power), Trump loses the election, but the price - sacrifice the whole of China. The US has plenty of replacement for Trumps.
     
    Last edited: Aug 15, 2019
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  7. Peter

    Peter Well-Known Member

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    Still others highlight her advocacy of the gold standard as insulating US monetary policy from an unreliable Fed.
     

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