Gold is on track to finish the week about $45 lower but you wouldn’t know it from Asia-Pacific trading this week. Every day since the start of the war we’ve seen significant gains in Asian trading, often fading later in the day.
That strength is a hint at where the bids are coming from: China. The attack on Iran is seen in China as a further breakdown of the rules based order but also an effort to box in China and disrupt a friendly country that supplies it energy. That will surely hasten their resolve to diversify away from US dollars, particularly if there are any medium-term plans for a military confrontation with Taiwan.
Surely China has seen the US quickly establish air superiority in Iran and launch a brutal military assault. That should frighten China and the rest of Americans adversaries.
In terms of the price action, look at this chart.
It shows bids in Asia every day this week, including a $60 gain so far today. That’s a nearly-systematic, programattic bid in gold and it’s hard to ignore. The weak hands have been shaken out in Europe and the US but Asia is a steady buyer and that likely points to official bids rather than retail.
This article was written by Adam Button at investinglive.com.
