Gold prices have surged this morning to their highest since October (over $1221) as leveraged hot money greatly rotates its repo-driven way out of risk assets and into Greenspan's alternative currency. However, there is a bigger problem for the biggest pairs trade that no one is discussing - apart from us - the decoupling of the long Nikkei, short gold trade [5] as the repo market folds in on itself from the suck out of $80 billion in collateral by China [6]...
Gold back at its highest since October...
[7]
and the Gold/Nikkei trade is coming undone very quickly...
[8]
See here for details on the Gold/Nikkei trade and its implications... [9]
Charts: Bloomberg
