Hey There Income Hunter,
China’s Hang Seng index dove 6.4% overnight, which was the biggest one-day drop since 2008 …
President Xi is back on the Tech regulatory war path and security will not come ahead of growth. (And the zero Covid policy is not helping.)
US-listed stocks, including Baidu (Ticker: BIDU) and Alibaba (Ticker: BABA) were down over 12% on the day, and the US may benefit from capital needing to flow to a “safe haven,” – which, believe it or not, the US represents right now …
Today we’ll take a look at the follow through rally from Friday and look for clues on where this rally may reverse …
How You Can Benefit From China’s Woes
China is going to end up being cut out of a future global growth revolution because of how the country has decimated its own workforce.
Their demographics are the worst in the world due to their one-child policy and the deglobalization trend will reverse the power they held as the world’s largest exporter.
They are now a one-trick pony with their digital currency and massive accumulation of gold the only power they hold on the global stage.
This is where you can get rich off China.
Brazil, Russia, India, China and South Africa (the so-called BRICS), plus the Saudis and Turkey, are coordinating efforts to launch an alternative digital currency to compete with the US dollar …
The BRICS effort, plus the ultimate shift in Fed policy away from tightening, will send gold soaring to new highs in the months ahead …
Check last month’s exports of gold from Switzerland …
Last week, the World Gold Council noted that India, China, Turkey, and UAE are importing tons of gold from Switzerland.
It was noted that the 191 tons of imports in September, shown in the chart above, amounted to ~100% of global monthly gold mine supply.
Why Gold Is Not Rallying – Yet
For now, gold is being held down while the West can still manipulate the paper market …
However, as alternative gold exchanges are being launched in China and Russia, regulators like the International Money Fund (IMF) and Bank for International Settlements (BIS) are working with all nations on a viable solution for the new monetary system.
Gold will play a role in the new system and we may be on the verge of a breakout in gold.
Technical Setup for Gold
China’s misery is having a negative impact on precious metals and most commodities right now, but eventually Xi and co. will reopen the economy …
This will bring about a double pivot as the Fed will ultimately move back to printing money and China will get a growth spurt on an economic reopening …
Bring It Home
At this point, there is no reason to take risk …
But on a break above the 50 DMA just under 1700, on good volume, jump on the SPDR Gold Trust ETF (Ticker: GLD) and add on a break above 1740 …
Just think about the flows into metals and commodities once the realization that central bank’s are powerless to stop longer-term inflation …
At the same time, investors will realize central banks must inflate to reduce the debt and may even revalue gold higher to devalue their debt and bonds …
That will be when a global asset shift away from financial assets to real assets will begin …
Patience will be rewarded!
Until next time ….
Live and Trade With Passion My Friend,
Griff