One thing is crystal clear, as the West has been selling gold China has been buying it. Billionaire Pierre Lassonde predicted this would happen: Chinese speculators fueled gold’s spectacular rise to new all-time highs, but this is how fevered the market trading became in Shanghai.
Chinese Speculators Pushed Gold Price Higher
May 1 (King World News) – Gerald Celente: Speculators taking long positions in gold on the Shanghai Futures Exchange—betting gold’s price will rise—have boosted their number of bets by almost 50 percent since September, according to the Financial Times.
The number of long futures contracts reached a record 324,857, Bloomberg reported.
2% Of The PBOC’s Entire Gold Hoard
The private Zongcai Futures firm has taken positions in about 50 tons of gold, worth $4 billion at current market rates and equivalent to 2 percent of the gold bullion held by China’s central bank.
Chinese investors are looking for a place to store their wealth outside of their country’s own stagnating economy, the FT reported, and gold is a favorite.
The frenzy of speculation on China’s futures market has been a key driver in gold’s rise past $2,400 this year, analysts said…
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“Chinese speculators have really grabbed gold by the throat,” chief strategist John Reade at the World Gold Council told the FT.
“Emerging markets have been the biggest end consumers for decades,” he added, “but they haven’t been able to exert pricing power because of fast money in the West. Now speculative money in emerging markets can exert pricing power.”
Gold’s price has shot up more than 40 percent since November as central banks have hoarded gold as key to their plans to diversify their reserves away from the dollar and as investors prepare for declining interest rates.
The price also has been pushed higher by the Mideast war and fears of its spread. The price set an all-time record of $2,431 earlier this month.
TREND FORECAST:
While gold prices are down from their $2,400 highs, we had forecast that since prices rose so sharply this year, there would be high volatility in this market sector. However, we maintain our forecast that when the U.S. Federal Reserve lowers interest rates, the dollar will decline and gold prices will go up.
Today, the World Gold Council reported that gold had its strongest first quarter since 2016 and that “Q1 saw no let-up in the pace of central bank gold buying,” and that central banks bought up more gold in the first quarter than any other start of the year.
On the AI note, WGC reports that “Technology demand for gold recovered 10% y/y as the AI boom boosted demand in the electronics sector.”
As to why the prices have been volatile, as we had forecast there would be high speculation in the ETF sectors. WGC reported that “Western and Eastern investors exhibited different behavior. Western gold buying remained robust, but was met with healthy levels of profit-taking. This contrasted with strong buying into the price surge in Eastern markets.”
Lassonde Predicted This
King World News note: Billionaire Pierre Lassonde warned King World News this was going to happen. Lassonde recently told King World News “The gold price is being set in Shanghai, and the Chinese are huge gamblers. They love gambling. And I think the Shanghai Gold Exchange could become a casino where they’re going to gamble.” But you haven’t seen anything yet according to Lassonde: “Under that scenario anything can happen. $18,000, $19,000 gold could happen. I would not be surprised.” Lassonde nailed it.
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