“Geopolitical Earthquake” That Is Historic China Russia Agreement Not Appreciated

GoldCore's picture

Friday’s AM fix was USD 1,292.00, EUR 948.60 and GBP 767.17 per ounce.                                        

Thursday’s AM fix was USD 1,294.50, EUR 945.93 and GBP 767.02 per ounce.

Gold advanced 0.31%, or $4.10 an ounce, on the week.

Chinese President Xi Jinping Raises Toast (In Vodka?) With Russian President Vladimir Putin  

Stronger gains would have been expected given tghe bullish developments. These included the central bank gold agreement, news of the very large 900,000 ounce Russian gold purchase and the easing of India’s futile recent ‘war on gold’. The historic Chinese Russian economic agreement is also bullish from a geopolitical and monetary perspective.

The deterioration of the situation in Ukraine and deepening military conflict is another development which is gold bullish. Russia's top general said on today that Moscow would take steps to respond to what he said was increased NATO activity near its border amid the crisis in Ukraine.

"The intensity, the operational and combat readiness of the NATO alliance's troops is being increased near the Russian border. In these circumstances ... We have to take retaliatory measures," General Valery Gerasimov, the chief of general staff of the Russian armed forces, said.

Gold in U.S. Dollars, 5 Minutes, 5 Days - (Thomson Reuters)

Given recent developments and the geopolitical backdrop we expect gold may soon break higher out of the its very narrow trading range.

There are a lot of things going on underneath the surface of the superficially calm gold market this week and this month. That superficial calm is likely to give way in the coming days as we appear on the verge of a sharp move to the upside or downside. This seems likely, once gold breaks out of the very narrow range between $1,283/oz and $1,310/oz that we have been in for nearly 5 weeks now.

Should physical demand pick up on rising geopolitical tensions and Indian demand return with the easing of import duties, gold should quickly challenge resistance at $1,310/oz.

Physical demand in western markets remains somewhat subdued. The lack of price direction is making some buyers hesitant.

Gold American Eagle sales by the U.S. Mint have been pretty lacklustre this month, at 18,000 ounces, less than half of last month's total and well down from the record levels of 70,000 ounces sold in May last year after April’s big sell off.

Palladium was steady near a two-and-a-half-year high on Friday and was headed for its best week in two months on supply fears due to the prolonged strike in South Africa and concerns about Russian supplies. Platinum was on track for its second straight weekly gain, also on supply worries.

Sales of platinum American Eagle coins by the U.S. Mint, which resumed in March after a four-year hiatus, have turned out to be pretty sluggish so far. After an early rush for coins, which saw 10,000 sold between March 10 and the end of that month, April sales eased to 1,200 ounces, while sales in May have totalled only 700 ounces so far.

Holdings of physically backed palladium exchange-traded funds hit record highs this week after heavy inflows pulled in half a million ounces of metal in less than two months. ETF holdings, as measured by Reuters, hit 2.271 million ounces, beating the previous all-time high from 2011 of 2.269 million ounces, after a near 8,000-ounce inflow into Standard Bank's Johannesburg-listed Palladium ETF on Monday.

Barclays Fined $26 Million Over Gold Fixing - Profited At Customer’s Expense
This morning, Barclays has been fined £26 million by the Financial Conduct Authority (FCA) for manipulation of the London gold fixing between 2004 and 2013.

Barclays has contributed to setting the price of gold in London since June 2004. The Gold Fixing is an important price-setting mechanism which provides market users with the opportunity to buy and sell gold at a single quoted price.

Former Barclays trader Daniel James Plunkett has been fined £95,600 and banned from working in the City.

As a director on the precious metals desk at Barclays, Plunkett was responsible for pricing products linked to the price of precious metals and managing Barclays' risk exposure to those products.

The FCA says:

The Financial Conduct Authority (FCA) has fined Barclays Bank Plc (Barclays) £26,033,500 for failing to adequately manage conflicts of interest between itself and its customers as well as systems and controls failings, in relation to the Gold Fixing. These failures continued from 2004 to 2013.

Much of the coverage if focussing on one incident with one trader rather than the period 2004 and 2013 as per the first line of the FCA press release. The convenient scapegoat “rogue trader” meme appears live and well.

The rogue trader aspect of the story appears to be old news as the Barclays precious metals trader, Daniel James Plunkett is accused of manipulating the price on June 28, 2012. He ceased to have a controlled function on the 12th October 2012, when he was terminated from the FSA Register.

Therefore, this is not new news for the Barclays or the FSA, despite the widespread publicity garnered today.

Barclays may be engaged in public relations due to the damaging allegations of gold price rigging.

The FCA need to provide more detail and evidence regarding their statement that the manipulation took place from 2004 to 2013. Otherwise, they too will be accused of being involved in public relations here in order to make it look like they are being tough on banks and that they are on top of the many gold price rigging allegations in recent months.

It is interesting that the allegation is that price suppression took place on June 28, 2012. This was a time of great concern regarding systemic risk and possible contagion in the Eurozone. Bond yields were surging in the Eurozone and risk free assets such as Treasuries and even Bunds were being questioned.

The allegations are interesting but may be a bit of a distraction. Especially, as some of the sharp sell offs seen in 2012 came about due to massive concentrated selling of gold futures contracts on the COMEX. Therefore, it would seem appropriate to have more concerns about massive concentrated selling and manipulation on the COMEX which is the remit of the CFTC.

Still, I suppose we should be grateful for small mercies and anything that shines a light on possible gold manipulation and may help create transparency, free markets and the rule of law should be welcomed.

The development shows how vulnerable the system is to abuse with little transparency or oversight of traders, banks and indeed central banks.

“Geopolitical Earthquake” As China Russia Sign Historic Agreement

China and Russia signed an historic agreement in Shanghai this week - the ramifications of which have yet to be appreciated.

The agreement between Putin and Jinping in Shanghai opens the way for a new stage of comprehensive partnership and strategic cooperation between the re-emerging superpowers. The agreement comes after several rounds of negotiations in the past decade.

Russia will sell $1 trillion worth of natural gas to China which importantly will be settled in Russian ruble and Chinese yuan rather than petrodollars.

Russian Central Bank Gold Reserves, Millions of Troy Ounces  - (Gold Charts R Us)

The official Chinese news agency, Xinhua News Agency, sees the deal as "another important result of China and Russia strengthening their relations as comprehensive energy partners".

At the BRICS (consisting of Brazil, Russia, India China and South Africa) summit in July, the $100 billion BRICS Development Bank was announced as a project financing bank for the BRICS and the developing world and as an alternative to the International Monetary Fund (IMF)  and the World Bank. This important multi-lateral bank is in gestation.

In April, Chinese President Xi Jinping visited Germany and suggested a daring proposal to expand and increase the use of the Chongqing-Xinjiang-Europe railway, which is already running from China to Germany. That railway decreases cargo travel time from eastern China to Europe by half.

Increased strategic cooperation, trade and economic growth could lead to a geopolitical earthquake in terms of the grand chessboard and the balance of power between the heavily the U.S. and emerging superpower China.

China and Russia signed an extensive joint strategic agreement that touches on more than just oil and natural gas. The two agreed to explore the joint construction of power plants, including nuclear power plants, in Russia to help China meet its energy needs.

They agreed to construct important infrastructure including cross border bridges and improve trade linkages through ports and railways. They are also looking to boost cooperation in a wide range of fields - from nuclear energy to civil aviation and manned space flight.

Increased cooperation goes beyond just trade, according to Zhang Lihua, a professor of international relations at Beijing's Tsinghua University. She said China could use Russia's support in dealing with Japan and with territorial disputes in the South China Sea.

"Russia, on the other hand, needs China's support with Syria, Ukraine and other issues in the Middle East," Zhang said. The two countries have "shared interests in dealing with regional disputes and in balancing the influence of the United States."

Russia is also facing the threat of growing sanctions from the West. Lin said the threat of sanctions "could have a small impact, but nothing beyond that." That's because "China has a different view" when it comes to sanctions.

Some papers are also analysing the impact of the deal on the world foreign exchange market.

A commentary in the Beijing Youth Daily says the deal will probably encourage more countries to stop trading in U.S. dollars, if China and Russia decide to switch to clearing payments in Russian roubles and the yuan.

"The world economy and finance will then embark on a process to get rid of the US dollar, and the dominance of the dollar will gradually lose its support. The US will then face more challenges in its ability to control global economics and politics," it says.

The era of the dollar as sole global reserve currency is gradually coming to a close - see Currency Wars: Bye, Bye Petrodollar - Buy, Buy Gold. Global reserve currencies have a life span of roughly 100 years and the dollar is in its latter days. It will go the way of previous reserve currencies - from ancient Roman to medieval Spain to 17th century Holland and to 18th century France to the British Empire. Through currency debasement, reserve currencies  lose their status - very slowly at first and more rapidly towards the end.

Reserve currency status does not last forever. Empires rise and fall.

The world is constantly changing and evolving. Nothing lasts forever …




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lasvegaspersona's picture

I am continually amazed that a gold site does not understand that physical gold demand is NOTHING compared to paper gold derivatives. Unless there is a delivery failure to significant customers we will continue to see gold price controlled by these paper derivatives. China could source 200 tons and compared to the thousands of 'tons' sold on the Forex markets these few hundred will not move the price.

As long as the ability to control the gold price remains the POG is going only where it is 'supposed' to go.

A day is coming when things will break. On that day only gold in your possession will matter. For now we just watch...and wait.

The gold market is for traders who are feeling lucky about their ability to predict the whims of those in control. It is the same market as treasuries. The price has little to do with supply and demand, it has to do with how these markets are being controlled to keep the monteary system from spinning out of the solar system.

orangegeek's picture

And remember folks, according to that beloved chart, reserve currencies don't last forever.


Cracks me up when I see this chart in articles.  I count 43 appearances so far.

marriedgeordie's picture

Get your facts right. Russia will sell $400 bln (not $1 trillion) worth of gas, from a field yet to be developed and using a pipeline yet to be built. Not to mention that the annual volume involved is about what Russians were selling to Ukraine in the better times. I cannot see how this is Earth-shattering. What is interesting is that the Chinese are willing to pay for that gas about twice what they are paying the Turkmens (yet, even this higher price makes the project borderline breakeven for Russia). In return, China gets preferential access to some of the Russia's mineral deposits and technologies (read, military know-how and shit). Not to mention the population imbalance between Western Russia and China. Overall, I see that by the time the pipeline to China is built, the supply of natural gas from Siberia to China might as well become an internal Chinese issue.

Oh, about that settling the deal in RUR thing. Money is basically a contract, and we all know now what a contract signed by the Russians is worth. If the Chinese agreed to RUR settlement, they are either dumb or not telling us everything, and my guess is that it's the latter.

Global Observer's picture

The settlement can be in either currency, RUB or CNY, but the price is linked to the price of oil, something neither country can manipulate.

Monty Burns's picture

Must say I agree.  The amount of money involved is comparatively small and the deal gets activated a long time in the future. But I guess it's the very fact of the deal taking place at all that's significant.

Peon14's picture

Everybody knows the de-dollarization of the world is being done so by the Central Banks including the Federal Reserve.  Russia and China are the patsies,  the fall guys who get the blame and who the American people can take out their vengeance on while the Central Banks trot out their new fiat currency.  P.S. all the gold in Fort Knox has been stolen and it wasn’t the Russians or the Chinese who did it.

Jano's picture

the two go against the us/eu/nato for thext few years.

we shall see some tricks from nudelman and hussein kenya obanana to disintegrate them. am eager to bet, what this will be... syria not, ukraine not, taiwan not

Lumberjack's picture

Sovereignty Is Indisputable



BEIJING, May 26 (Xinhuanet) -- Chinese governments since ancient times have never given up the exericise of its jurisdiction over South China Sea islands

A series of recent actions taken by Vietnam to disturb and play up the normal drilling of Haiyang Shiyou 981, an oil rig owned by China National Offshore Oil Corporation, in the waters off China's Xisha Islands has put tensions in the South China Sea in the spotlight of worldwide attention.

Hanoi should know that such drilling in the said area is China's sovereign right endowed by the United Nations Convention on the Law of the Sea.

First, the Xisha Islands have been a Chinese territory since ancient times. Available historical documents record that Chinese people first discovered the South China Sea islands in the Han Dynasty (202 BC-AD 220) and also gained an initial knowledge about the South China Sea. With the progress of the navigation technology and the invention and wide use of compass, the navigation and activities of Chinese people at sea tended to be more frequent from the Song Dynasty (960-1279). Since then, South China Sea islands and adjacent waters have not only become a wide area for Chinese people to engage in production and commercial activities, but have also become an important water area for China's navy forces to patrol and defend. In AD 971, Zhao Kuangyin, the founding emperor of the Song Dynasty, began organizing a patrol naval squad, whose regular cruises and patrols in the South China Sea established China's jurisdiction over the Xisha Islands. In 1279, Kublai Khan, the founding emperor of the Yuan Dynasty (1271-1368), sent General Guo Shoujing to the South China Sea for the inspection and research of the sea's geography and landscape to offer security guarantees for the cruising imperial naval force. Afterwards, the Ming (1368-1644) and Qing (1644-1911) dynasties both put the South China Sea islands and adjacent waters under their jurisdiction, and it has ever since become a common practice for China's naval forces to make inspection tours for coastal defense and exercise sovereignty over them. There were also countless maps, archives, documents and logs reserved from the Ming and Qing dynasties that recorded the South China Sea islands.

The traces of Chinese people's activities from ancient times have also left numerous remains of historical relics there. Aside from the sites of historical relics, quite a few stone tablets erected during the Qing Dynasty and the Republic of China (1912-1949) on South China Sea islands and reefs to maintain and declare China's sovereignty over them have also been excavated. Most of these stone tablets were the monuments of then Chinese government officials or military officers who landed on these islands or reefs for inspections...

joego1's picture

I'm sure other countries have similar records of sailing the same waters.

Lumberjack's picture

Court takes over Gas Natural's Italian units in mafia probe




A court has taken temporary control of the Italian units of Spain's Gas Natural Fenosa as part of an investigation into possible organised crime activity, the Spanish company said on Friday.


The move was a preventive measure that will not affect business operations or earnings, Gas Natural said in a statement to the Spanish securities regulator.


"This is part of an investigation headed by the Palermo public prosecutor, which aims to keep organised crime from possibly infiltrating the activity of the group's Italian companies through contractors," the statement said.


Gas Natural said the Tribunal of Palermo had put under administration the following subsidiaries: Gas Natural Italia Spa, Gas Natural Distribuzione Italia Spa and Gas Natural Vendita Spa.


"These companies are collaborating with Italian authorities and understand this is a necessary process to rule out any (organised crime) activity in their business," a source close the company told Reuters.


Gas Natural's Italian division represented 1.8 percent of the company's 2013 earnings before interest, taxes, depreciation and amortisation.

Cloud9.5's picture

Who was the idiot that trumpeted that the collapse of the Soviet Union was the end of history?  The United States collapsed fifty years ago when we could no longer sustain our appetite for oil. Unable to provide for ourselves the world’s most important resource, we turned to extortion.  Resource wars and our status as the only printers of the world’s reserve currency has allowed us to become a consumer nation.  In the process, we conned the rest of the world into trading real products to include oil for a digital currency we could create with a mouse click.   This is the reason the charlatans of this charade are the best paid among us.


Russia is where the United States was at the beginning of the 20th century.  They are an oil exporting nation.  They will continue to enjoy the power and riches that brings to them until the oil runs out.  They like us will conclude their rising status is a result of their exceptionality when in fact it is based on relatively abundant resources.


China is in overshoot.  Their billion plus population has glimpsed the late American lifestyle.  It is a lifestyle impossible to attain in a finite energy limited world.  Nevertheless, because of the visible wealth disparity, the slaves working in the factories will come to believe they have been cheated out of what was theirs by the party and its familiars.  The resulting rage will tear their system apart and famine will return to China.


One way or another, we are going to decentralize as energy drains out of the system.


Global Observer's picture

They will continue to enjoy the power and riches that brings to them until the oil runs out.  They like us will conclude their rising status is a result of their exceptionality

Russia is recovering from a collapse after people enjoyed a much higher standard of living during Soviet times than they do today. So it is next to impossible for them believe in any kind of exceptionalism.

joego1's picture

"One way or another, we are going to decentralize as energy drains out of the system."

One way or another, we are going to decentralize as cheap energy drains out of the system.

Lumberjack's picture

China opens 1st environmental court but foreign corporations more exposed to whopping claims


A. Introduction

China opened its first Environmental Court this week in Fujian Province to streamline environmental litigation and deal with a growing number of cases of complex environmental claims, including a number of so-called green-collar crimes (environmental claims that are criminally prosecuted).

It’s a great idea that should be emulated in Canada where environmental claims get bogged down by endless process and are affected at times by inconsistent decisions rendered that involve participants who in some cases lack subject matter legal expertise, both within the bar and at the bench. As First Nations, especially in Quebec and British Columbia, gear up for climate change litigation in Canada, the need for an environmental court will become more salient to address the international complexity of the issues. Private energy companies and government bodies will be the main targets of such litigation – it makes legal and economic sense therefore, to establish specialized courts to efficiently and effectively deal with environmental claims for legal and business certainty.

The Fujian Province Environmental Court has 12 appointed consultants who are specialists in environmental law, environmental sciences and environmental crimes. Their role is to assist the Court in determining facts, issues, interpreting evidence and acting as quasi-expert witnesses.

Environmental crime specialists are financial crime specialists who investigate and quantify economic damages associated with environmental violations. Traditionally, they usually quantify potential legal costs for projects involving environmental risks on behalf of banks and other lenders. The nexus between economic crimes and financial crime is novel in Canada, although certainly not elsewhere. For example, in Dubai, environmental crimes are predicate offenses to money laundering offenses pursuant to its national anti-money laundering and counter terrorist financing legislation. The connection is relevant because environmental crimes are a subset of financial crimes, the proceeds of which are illicit and subject to criminal prosecution...


[Here come's the NGO's]

...F. Increase in litigation

Another expected result is that global NGOs will likely fund environmental cases in China to advance environmental justice, establish precedents on environmental law that can be applied elsewhere, and for the prospect of damages. Foreign corporations potentially facing environmental liability should take steps to quantify and crystalize potential damages now before the political situation in respect of China’s deteriorating environment becomes too hot to handle (i.e., too politically charged to negotiate environmental liability caps) and before new environmental laws come into effect on January 1, 2015.

F-X's picture

In that link, Smith says he thinks the BIS and IMF are the Belgian buyers. But he doesn't say where they would get the money to do so.

Global Observer's picture

Dr. Paul Craig Roberts believes the Fed was buying the US treasuries through Belgium.

lakecity55's picture

July 4, 2025

US President Vladimir Xi Wang Today put the US back into space with a new rocket from Cape Putin.

Fred123's picture

The agreement is vastly overrated. The two clowns in the photo will eff each other when the time is right and they know it. Only the ignorant believe this is an historical agreement.

DaveyJones's picture

they may be foreign clowns but ours have bigger feet and noses all in the wrong place

part of the agreement is worth over a third of China's natural gas 

Both China and Russia are a little bigger than us

that is if you count real things over criminals and digits


Winston of Oceania's picture

Most of the dipshits here think Russia and China are going to form a gold backed currency. THAT WILL NEVER HAPPEN. How would their banksters then steal from them? Silly sheep bleating on and on about the might of russchina...

So What's picture

The demise of the great American Empire coincide with the peak of Jewish Power.
Hm. Coincidence?

Monty Burns's picture

The demise of the great American Empire coincide with the peak of Jewish Power.
Hm. Coincidence?  Or cohencidence?

Dan The Man's picture

fool...they escape to america and you think they want to destroy it?  why do we waste our time with you idiots?

Azannoth's picture

America(USA) has served it's purpose, the creation and protection of the Jewish State, now that the Zionists have a firm foothold(protected by hundreds of Nuclear weapons and means of delivery), they no longer need American patronage.

On the other hand the very principles America has been established and functioned on for almost 200 years are Very Dangerous to the Zionist Elite, self reliance, independence, personal responsibility, gun laws etc. all those give people the the "wrong idea" so "America" must go.

intric8's picture

They're patient. The transient rise and fall of governments are just a temporary setback. Most times, its advantageous. Given a revolution in the us, who will rise to the top when the dust settles? Who has all the money and influence? Do you know what was attempted in 46-47 on our own soil, right under our noses? The destruction of our country would be most welcome as far as their agenda is concerned. Get rid of that pesky constitution once and for all.

kwatinhu's picture

Until we shake off the clowns, leeches and fools we have put in charge, we deserve our fate.

Winston of Oceania's picture

Unless you are a worm you make your own fate...

Ocean22's picture

North amerika has been targeted for destruction. We will not wake up in time.

GlobalCtzn's picture

That, I believe is the conclusion that any thinking, sane, analytical man must come to. It is the scenario I am running in my model. Doing my best to prepare accordingly.

Winston of Oceania's picture

Then get the fuck out, you are just dead weight and we do not need you.

GlobalCtzn's picture

In your community you do not need people who see what is coming? You do not need people who understand the scam and are actively trying to position themselves as best they can in order to not be utterly decimated by it, like many surely will be? You and yours want no part of people using what they see as the most likely scenario as their baseline to plan from? 


Who are you, and where are you making your stand? I want to be far from that neck of the woods. Filled with dumbasses clearly............

Winston of Oceania's picture

I want people who are willing to take a stand and not just making plans to leave my community to fend for itself, in other words dead weight.

ThisIsBob's picture

Oh, just screw the bloody dollar.  Spent a good part of my life chasing it.  Started with nothing and still have most of it left.

AdvancingTime's picture

This is big and has the potential to shift power away from the West. We had better clean up our act fast. I recently found myself thinking about the decline or collapse of great empires and realized that it is often hard to predict when or how their demise will occur. One sign of the end is a massive growth in crony capitalism and corruption.

The signs of decline may be everywhere but that does not guarantee the end is near. As the foundation crumbles away it is not uncommon for those in power to extend their rule by many tricks and changing the rules in order to gain a new lease on life. More on the subject of how empires collapse in the article below.



intric8's picture

Poroshenko's election win in Ukraine just extended the wests 'lease on life' in the region. This is typical. Governments crumble, and jews rise to the top as the dust settles. The bolshevik revolution, weimar republic, the us govt post civil war, etc

BorisTheBlade's picture

Good point, but trickery and changing rules goes only that far and often works with Empire's own population. Outside players, that with ambition can see through such trickery. That being said, of course the exact moment can hardly be predicted. 

Carl Popper's picture

History rarely repeats but it often rhymes.


We are going to hate this little ditty if it rhymes in our lifetime.

I am Jobe's picture

Moat Amerikans are asleep and will wake up once the reserve currency status is gone. Matter of time

Long on PM's bithczzz 

Carl Popper's picture

C'mon man.    At least get it right.


It's bitchezzz.   Additional z's optional

Chuck Walla's picture

New Leech same as the Old Leech.


Soul Glow's picture

Reserve status holds as much weight as current top pop star.

The dollar is Paris Hilton.  Paris who?


sunnyside's picture

What does this have to do with Kim Kardashian getting married again?  Quit trying to distract us from important things.

DaveyJones's picture

Silly, Kim got a gold toilet seat for a wedding present

BOPOH's picture
  1. Death to american leech!
Dick Buttkiss's picture

"Through currency debasement, reserve currencies lose their status - very slowly at first and more rapidly towards the end."

To quote Hemingway in The Sun Also Rises:

"How did you go bankrupt?"

"Two ways: gradually, then suddenly."

kchrisc's picture

If only 'leech' were all that the DC US were.