Gold Prices Rise To $1,326/oz as China U.S. Treasury Buying Report Creates Volatility

- Gold prices rise to $1,326/oz on concerns China may slow U.S. Treasury buying
- Equities fell sharply on the report as did Treasurys and the U.S. dollar
- Chinese officials think U.S. debt is becoming less attractive compared to other assets
- Trade tensions could provide a reason to slow down or halt U.S. debt purchases
- U.S. dollar vulnerable as China remains biggest buyer of U.S. sovereign debt
- Currency wars to return as China rejects U.S. hegemony in Asia


Gold prices in US dollar (GoldCore)

Gold prices rose yesterday, reaching their highest level in four months as the dollar fell just after a report that Chinese officials had encouraged slowing or halting purchases of U.S. Treasury securities.

The greenback fell against all major currencies and especially gold after the report.

Spot gold prices rose 1.2% from session lows of $1,310/oz to session highs of $1,326.56/oz prior to falling back and closing in New York at $1,317.40/oz where it remains in late morning trading in London.

U.S. Treasury yields jumped to 10-month highs following a Bloomberg  report that Chinese officials have recommended China gradually sell or halt their buying of U.S. debt.

China is likely to stop buying U.S. Treasurys, the question is when, and when it happens it will have major repercussions for U.S. monetary policy. It will greatly hamper the Federal Reserve in reducing its bloated balance sheet and may force the Fed to begin QE again which would be very positive for gold.

Chinese relations with the U.S. remain frayed and Trump's aggressive economic and military policies are likely to see a monetary response from China.  As China-U.S. relations deteriorate, so too will currency wars return as China rejects U.S. hegemony in Asia.

The dollar and financial and monetary dominance of the U.S. is increasingly at risk. And as monetary and economic tensions between the struggling superpower and the emerging superpower deepen -  a gold-backed yuan becomes more likely.

If China were to partially back its yuan with gold it would require a gold price of $64,000 per ounce, 50 times gold bullion’s price today, according to research from respected Bloomberg Intelligence (see below).

Recommended Reading

China Sets Up Gold Investment Fund For Central Banks

China Catalyst To Send Gold Over $10,000 Per Ounce?

Gold At $64000 - Bloomberg's 'China Gold Price'

 

News and Commentary

Gold inches up on weaker dollar, equities (Reuters.com)

Gold May Have More Room to Run in 2018 - Bank of China (Bloomberg.com)

Dollar dented by report China may halt bond buys (Reuters.com)

Buffett on cryptocurrencies: 'I can say almost with certainty that they will come to a bad ending' (CNBC.com)

Cryptocurrencies may succeed as money in some backward places - Goldman (Bloomberg.com)


Source: U.S Treasury Department

Asian central banks push back, sending dollar bears a warning (Bloomberg.com)

This is how China’s global ambitions are just getting started (StansBerryChurcHouse.com)

Pimco, Citigroup Sound Complacency Alarm for Global Economy (BloombergQuint.com)

Palladium May Continue To Outperform Platinum (Bloomberg.com)

'Recovery!?'... But At What Cost? (ZeroHedge.com)

 

Gold Prices (LBMA AM)

11 Jan: USD 1,319.85, GBP 978.14 & EUR 1,104.45 per ounce
10 Jan: USD 1,321.65, GBP 976.96 & EUR 1,103.31 per ounce
08 Jan: USD 1,314.95, GBP 972.01 & EUR 1,102.19 per ounce
08 Jan: USD 1,318.80, GBP 974.33 & EUR 1,099.09 per ounce
05 Jan: USD 1,317.90, GBP 973.40 & EUR 1,094.25 per ounce
04 Jan: USD 1,313.70, GBP 969.77 & EUR 1,090.24 per ounce
03 Jan: USD 1,314.60, GBP 968.20 & EUR 1,092.96 per ounce

Silver Prices (LBMA)

11 Jan: USD 17.01, GBP 12.64 & EUR 14.24 per ounce
10 Jan: USD 17.13, GBP 12.64 & EUR 14.27 per ounce
09 Jan: USD 17.05, GBP 12.60 & EUR 14.30 per ounce
08 Jan: USD 17.17, GBP 12.68 & EUR 14.33 per ounce
05 Jan: USD 17.15, GBP 12.66 & EUR 14.24 per ounce
04 Jan: USD 17.13, GBP 12.64 & EUR 14.20 per ounce
03 Jan: USD 17.12, GBP 12.63 & EUR 14.25 per ounce


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Comments

JIMSJOE2 Fisherman Blue Fri, 01/12/2018 - 07:44 Permalink

More fake news and the metals promoters have taken the bait hook, line and sinker. China has denied the whole thing. The guy  doesn't understand markets and what has been happening since 2011. For a trade to go thru there must be a buyer and a seller and capital has been flowing into dollars and US equities since 2011 most from Europe as it collapses and will continue as we move further into 2018. This has caused enormous problems for the FED as they know they cannot stop what is happening in Europe. They have been using their minions for months pushing a certain narrative. Just recently the former FED member Fisher came out as said that since 2012 they have been front running US equity markets and when liquidity is removed markets will collapse. Folks think critically here. Why would a former FED member say markets are going to collapse? First of all the FED cannot buy equities nor corporate debt nor mortgage backed securities from banks unless they are US government backed agency debt from the 3 US housing agencies. Secondly the FED has been desperate to weaken the dollar and to stop the capital flight out of Europe from moving into dollars and US equities. They know that as we move into 2018 the capital flight out of Europe will accelerate and again cause massive dollar strength and move US equities much higher. This will hurt US exporters especially commodities as a strong dollar makes these more expensive in foreign markets. In addition this will hurt earnings of money centers banks on wall street as they have lent trillions in dollar denominated loans to foreign entities and a strong dollar makes these almost impossible to service.
Now currently because of the new tax plan we are seeing a coordinated effort by large currency traders in London and New York along with the trading desks of large US multinationals who have to manage their foreign currency holdings. They have recently been causing dollar weakness to make additional profits when they convert foreign currencies back to dollars and bring these back to the US. They know that as we move further into 2018 that the capital flight out of Europe will accelerate and cause massive dollar strength again and move US equities higher. They want US equities to move lower so they can buy shares back at lower prices and then increase dividend yields. Just recently they have been successful with creating short term dollar weakness but US equities are still moving higher from both domestic and international capital flows. .
     The FED first had a BOA analyst claim gold was ready to take off. They then marched out the head of the CME claiming gold should be at $5000. They then had Goldman claim gold is a currency and and your best hedge with its head claiming all markets are overvalued. They they have been having Rickards pop up everywhere claiming the dollar is doomed, we are going to war and gold is going to $10,000 to $40,000. Never mind the fact that even at $10,000 gas at the pumps would be over $12 and everything shipped including food, medicine and essentials would be unaffordable to most and collapse the economy and all levels of government as tax receipts fall off a cliff. Then they planted in the Nikkei Review the fake news that China was going to back the new crude futures contract with gold and to allow the yuan to be fully convertible to gold. All fake news. Just recently Bloomberg reported that China was going to stop buying treasuries and what was there source? The Nikkei Review. China quickly denied all of this as the last thing they want is to have over $1.2 trillion based assets fall in value. Folks are we seeing a pattern here yet? This is all about using the MSM and also the alt media pushing a narrative and that is to create dollar weakness and stop capital from Europe causing dollar strength and moving US equities higher. This is all short term as again as we move further into 2018 Europe will collapse. What do you think a strong euro and pound will do to EU and UK exports? Europe will collapse faster.

In reply to by Fisherman Blue

Greenspazm JIMSJOE2 Fri, 01/12/2018 - 12:01 Permalink

"Capital flight out of Europe" - a doubtful and unsubstantiated premise. Or has it been predicted by that idiot M. Armstrong's TRS 80 computer model?

  Agreed though about the bullshit Nikkei Review yuan to gold piece (Hugo Salinas price fell for it hook line and sinker), quite evidently fake. Ricktards too, that guy is a spook.

In reply to by JIMSJOE2

Consuelo Thu, 01/11/2018 - 11:50 Permalink

 

 

China will not do anything with it's gold in relation to backing the Yuan or elsewhere, until the United States is weakened enough (internally/politically) to the point where it does not have the will to sustain a military conflict, let alone a military conflict with a major economic and military power in China.

How far off in the future is anyone's guess, but given the current turmoil, political disillusion, growing strife and divisions within the U.S., perhaps not as long as many would like to think.

VIS MAIOR Consuelo Thu, 01/11/2018 - 20:11 Permalink

usa can not  do wars if petrodollar will fall! kapis?  last "show room" around NK is max what they can to do..

they have no money to rebuil puerto rico ar bribe pakistan., attack iran,

just watch what they do no what rangutard tweeting 

if finnacial chaos will happen only that gold will hope for  new world order

happy india jump with brics to ready to jumaji 

REMOVE HAMBURGER!! 

In reply to by Consuelo

Kafir Goyim Thu, 01/11/2018 - 16:21 Permalink

> If gold backed International debt of @ 233 Trillion, (Quarter Zillion?) then what would ONE ounce be priced at?

171,300 tonnes (metric tons) = 5,507,422,961 t oz (troy ounces)

$233,000,000,000,000 / 5,507,422,961 t oz = $42,306/t oz

 

Silver Savior Thu, 01/11/2018 - 19:59 Permalink

When I look at a Perth Mint gold coin I rotate it side to side and admire it's proof like finish then I start thinking why would anyone want US dollars in the place of this. 

I think it's good that crypto came along. If anything it made more people aware of the situation of the dollar. Just have to get them to sell the crypto for the real wealth and that's physical gold and silver. Platinum group metals too.

The sooner the world gets out of this dollar mess the better. Please China. Don't buy anymore of this shit so Qe can get going!

VIS MAIOR Silver Savior Thu, 01/11/2018 - 20:17 Permalink

 but chinese and asian are not lazy like ausiees .its not all about have resources)))) i work with kiwis years.. australia is corrupt hole where everythink take long time.. just go with some papers to gov, ofices..)) czechs wait one month for one small car from port container ship becouse assholes from offices have some paper work with it. its all on tv!

ausies will done. thats why they want attack korea. 

watch eev jones vblog 

In reply to by Silver Savior