GOLD 0.51% $1,391.7 gold futures

There was a saying in the early years: "gold and oil will never...

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    There was a saying in the early years: "gold and oil will never flow in the same direction."

    Obviously this is no longer the case nowadays, gold and oil are indeed flowing in the same direction: toward China.

    When gold price plunged, more gold went to China, and it has continued to flow to China to this day.

    With the big oil price decline recently, more oil tankers are sailing toward China.

    China has maintained a moderate level of trade surplus but its US treasury bond holdings have been declining slightly. So obviously China is not recycling trade surplus dollars into UST bonds, and is actually reducing UST holdings a bit (I suspect not through selling but by not rolling over matured ones). it's logical conclusion that China has been spending the trade surplus dollars on purchasing stuff on the international market: oil, gold, other commodities, farms, businesses, real estates, etc.
 
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