Gold opened uip $25 dollars this morning - not a huge devlopement, but surprising since Gold was on schedule, according to most analysts, for a mid cycle low a few hundred dollars lower.
Of course this low could still be reached.
But a couple of new trends seem to be driving this counter trend rally:
1) The political regeim is threatening hawkish Fed voting Governors with Justice Department persecution if they don't immediately resign. Fed Governer Lisa Cook now must decide if fighting inflation is worth a trip to a Somalian dungeon. This developement contradicts those who point out that even if the regeim replaces Powell with a loyalist, rates can only be lowered by a consensus vote. It seems the regeim has an answer for that objection. They will get rates where they want them. And that is back to ZERO.
2) Just as significant, and equally damaging to the dollar in the long run, is a news flash signalling that China is agreeing with Kenya to refinance their dollar denominated debt in Yuan.. Bid deal, right? Kenya is just a shithole country, as far as America is concerned. But, it seems China considers Kenya to be a terrific source of Rare Earth, and Gold mining wealth. This developement gives teeth to the de-dollarization trend that many critics have dismissed as a fantasy.
At the same time China is is taking advantage of the US Regeim's puzzling tarrif attack on India to effect a raprochement of trade and economic developement with their long time rival. This too poses a grave long term challenge for the dollar.
So which of these developements are driving gold's counterrally this morning?
Who cares?
Over time this is all terrific news for gold.
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