China Pushing Back, Gold Spikes $10

As we said a few days ago in our post,  Is Gold Finished,

to get a new bull market jump started…a bull market sparked by geopolitical risks, which could increase markedly, in a scenario where, say,  the new President-elect tries to bully the Chinese on various issues, and Mr. Xi, probably China’s strongest leader since Mao,  has to save face.  One morning we could wake up and U.S. battleships are squared off with the Chinese navy in the South China Sea.   Gold soars!  God help us.

We get the news this morning,

China has seized an unmanned underwater vehicle deployed by a U.S. Navy ship in international waters, according to Pentagon officials.

The seizure of the underwater vehicle took place Thursday, about 50 nautical miles northwest of Subic Bay in the Philippines, Pentagon Press Secretary Peter Cook said in a statement Friday.  – NPR

And this from the Guardian,

China’s Liaoning aircraft carrier battle group has conducted its first exercises with live ammunition, the country’s navy said, in a show of strength as tensions with the US and Taiwan escalate.

China’s first and only aircraft carrier led large-scale exercises in the Bohai Sea, the navy of the People’s Liberation Army announced late on Thursday.

Definitely China pushing back on President-elect Trump’s Taiwan strategy and tough rhetoric.

And we get this when the tape bomb hits the wires,

gold_dec16

Probably won’t stick,  but, for sure, gold going to build in a geopolitical risk premium as tensions with China heat up.

Don’t think putting Taiwan on the table as a negotiating ploy is a good strategy, in our opinion.   Some things are off limits and Mr. Xi is sending that signal on Taiwan.  Tantamount to asking your opponent to put his/her mother on the table as a negotiating chit.  Some things are just not negotiable.

Stay tuned.

 

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2 Responses to China Pushing Back, Gold Spikes $10

  1. socraticeclectic says:

    shared on my Facebook page

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