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What’s Going On With Gold Now? The Headlines

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What’s Going On With Gold Now? The Headlines

By Michael MacDonald

Yuan Gold Trading in Hong Kong on 'Triple Demand' ‎- China Positioning CNY as Reserve Currency

CFTC data shows that hedge fund managers, large speculators and gold and silver traders increased their net-long position in New York gold and silver futures. Speculative positioning in the market remains at very low levels after sharp liquidation which suggests gold may have bottomed and should rise from these levels.

Hong Kong, the world's third-largest gold trading centre, has become the world's first place to offer gold trading in yuan, further positioning the yuan or renminbi as a potential global reserve currency.

Hong Kong’s Chinese Gold & Silver Exchange Society, a century old bullion bourse, has introduced gold trading quoted in Chinese yuan, making it more convenient for Chinese people and high net worth individuals (HNWs) holding yuan to invest in the precious metal and opening a new way to hedge.

With gold now traded in yuan, it is only a matter of time before oil is traded in yuan thereby positioning the yuan as ‘petro yuan’ and a rival to the petrodollar’s status as the global reserve currency.

"By attracting both local and international investors, the Renminbi Kilobar Gold is a significant step towards internationalizing the renminbi," said Haywood Cheung, president of CGSE.

“There’s triple demand for this yuan product,” said Cheung late Friday. “Investors can enjoy the bull market in gold, the yuan’s appreciation and hedge gold denominated in other currencies against the yuan.”

“The uncertainties in the global economy are supporting gold”, Cheung said.

“It’s still the right timing,” Cheung said. “With the depreciation of the dollar and problems in the Eurozone, investors realize they want some other currencies that are safer like the renminbi. Gold can be a way for people to bet on the yuan, even it’s not yet fully convertible.”

“The sudden influx into gold bars may take away half of the yuan liquidity in Hong Kong,” Cheung said.

Should even a small amount of traders of the new yuan denominated gold contract attempt to take delivery of physical gold bars it may create supply issues in a marketplace that is already experiencing supply constraints.

And...

News has come in that "Germany and France are spearheading a multi-trillion dollar “shock and awe” program expected to be agreed next weekend and presented the following week at the G20 summit in Cannes.

The solution involves a massive blast of QE which will be highly inflationary and thus will drive gold and silver and other commodities higher.

Owning physical gold and silver is a form of insurance against the stupid authorities who are ruining your currency. Not only will precious metals protect your wealth, they will increase it as whatever new form of currency emerges will surely value gold well above 5k and more likely above 10k.

Conclusion: We are living through a historic time and all markets are going to get even more unpredictable and volatile as the governments and big bankers of the world try to hold Humpty Dumpty together. Gold and silver markets could see another 10 to 15% correction in the short term or they could shoot up 25% in a week. Short term analysis is dead because all markets are rigged, no free market exists.

If the manipulators do push metals down further, back the truck up. If the market moves up quickly, back the truck up. Why? Because the gold and silver market is the size of a needle in the hay hay stack of paper currencies. As the financials begin to crack up, a lot of those paper currencies are going to run into the metals market and when that happens, the supply will be gone in short time and the price will be north of $5,000 gold and $500 silver.


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