China And Gold
Losing Its Sparkle?
China drives the bullion price up … and down. The latest chart pattern illustrated below looks unfavourable, with gold in Chinese Yuan terms set to test and break below the important RMB30,000/oz barrier. See the following chart. Given her solid capital controls and ‘manipulated’ exchange rate, this translates more or less into the same picture for the US dollar gold market.
China’s gold buying fever has been dampened by a sharp reversal of People’s Bank’s (PBoC) liquidity injections into markets from its 2nd March peak reading. The PBoC has removed a whopping RMB 1.8 trillion (US$260 billion) of liquidity, or roughly 4.5%, in just 12 weeks. This ominous recent Press headline spells it out. China has just hit the brakes!
