China's Gold Blitz

Beijing’s Secret War Against The Dollar

Gold bugs have historically learnt to associate Iran tensions with a strong bullion price as global investors dive for cover. Latest events in the Gulf may or may not lead to further spikes in gold, but this narrative misses the bigger point that the yellow metal is being coveted and stockpiled by China. What’s more, it is fast disappearing into both private vaults and State coffers. Evidence the chart below. It could prove the most important macro chart of all because it links the surging gold price with the ‘secretive’ monetization of the Chinese Yuan. It also helps explain the puzzling concomitant stability in US Treasury bond term premia and the lackluster crypto market.