Here is a look at the pullback in gold, plus the US and China deal.
Despite Volatility, Gold Will Keep Rising
October 27 (King World News) – Peter Schiff: Gold is down this morning as investors react to news of a trade deal with China that will move us closer to where we were before Trump escalated the war. But the deal will do nothing about soaring budget deficits, rate cuts, inflation, or de-dollarization. Gold will keep rising.
Gold, Plus US & China Deal
Peter Boockvar: Any agreement between the US and China will be less a deal than the realization that both countries really need each other with respect to trade. Getting China to buy more soybeans or easing their delivery of rare earth magnets or reducing the tariffs we put on them (which we mostly pay for) and providing more tech products is all just going back to the way things were as we entered the year (outside of US export controls on certain semis). If there is a lesson to learn here also is that limiting China’s access to US technology has backfired as all we have done is create a tremendous competitor that will soon catch up to us. We also sped up their desire to be more independent of us trade wise and thus we are losing a major customer and gaining a major competitor. Again, economics will ultimately trump (no pun intended) ideology it seems with any deal agreed upon and the desire of some to decouple from China commercially is just delusional as we both really need each other, for now.
While markets are celebrating today the outlines of a framework deal, they didn’t seem to be too worried about no deal with markets at record highs last week. A bull run though is a bull run. The Chinese market response was higher too with the Hang Seng up 1% and the Shanghai comp up by 1.2%. The Nikkei, with hopes for the new PM, jumped another 2.5%. Sitting out today’s party though were European bourses which are all flattish. Global bond yields are modestly higher. On the commodity side, copper prices are popping higher but oil prices are lower. Gold continues to take its deserved breather.
Congrats to Javier Milei whose party won the midterm vote and thus will give him more time and help to implement a free market approach to their economy that has been breaking down the barriers to commerce that have been building for decades.
To listen to Tavi Costa discuss exactly where we are after the recent pullback in gold, silver and mining stocks and what to expect going forward CLICK HERE OR ON THE IMAGE BELOW.
To listen to Alasdair Macleod discuss this week’s trading in gold and silver as well as what to expect next week CLICK HERE OR ON THE IMAGE BELOW.
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