The alarm has sounded, global gold prices have hit new highs, China has stopped buying gold, while India has brought back hundreds of tons of gold to the country.
What important signals are being released behind this?
It can be said that the whole world is now releasing bad news, that is, both global investors and various countries are strengthening their expectations for the recession of the US economy, and the global economic environment is facing new turmoil again.
Let's take a look at a few things.
First, the non-farm data in the United States in June has come out.
Although the number of employed people has reached 206,000, which is higher than the expected 190,000, it has still decreased a lot compared to 272,000 in July.
Secondly, the unemployment rate in the United States has reached the highest level in two and a half years, and the wage growth has dropped to the lowest level in three years.
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This set of data indicates that the US economy is definitely weak, which may force the Federal Reserve to lower interest rates, declaring the US harvest plan to have completely failed.
On the other hand, all kinds of capital are unanimously pessimistic about the US economy.
A Canadian investment research company predicts that the US economy will fall into a deep recession this year or at the beginning of 2025.
Nomura analysts predict that the worst result is that the United States will stop repaying debts!
Based on this economic pattern, we are not surprised that the price of gold has hit a new high again, because everyone's risk aversion is even stronger.
Let's take a look at a set of data: Now, the August gold futures price on the New York Commodity Exchange has reached $2397.70 per ounce, an increase of 1.19%.
It is a new high for a month.
However, a polarized situation has occurred internationally.
That is, on one side, China has stopped buying gold for three consecutive months, while on the other side, India is buying a large amount of gold.
Now India's gold reserves have reached 841 tons, higher than Japan and second only to Switzerland, rising to the eighth place in the world's gold reserves.
So, these two major countries have adopted completely different approaches to gold under the current environment, what signal is being released behind this?
Let's talk about China first.
According to the latest data, as of the end of June 2024, China's foreign exchange reserves were $3,222.358 billion, a decrease of $968.1 million from the end of May, and China's gold reserves were 72.8 million ounces, which have stopped buying gold for three consecutive months.
So why did our country stop buying gold?
The first reason is to avoid the risks brought by the gold premium as much as possible.
Because we must know that our country has been increasing its gold reserves for 18 consecutive months, and the gold reserves have reached more than 2,000 tons, ranking sixth in the world's gold reserves.
In addition, the gold premium is now obvious and has been far away from the value of gold itself.
At this time, our country appropriately slows down the increase in gold, which is beneficial to the diversification of our country's foreign exchange reserves, and thus can achieve the maximization of benefits.
The second reason is that our country's foreign exchange reserves are now the first in the world, and there is enough anti-risk ability.
Because even if the US economy declines, the US dollar is still the strongest currency in the world.
Therefore, our country has a certain amount of foreign exchange reserves to minimize its own risks.
So far, it can be said that our country has made full preparations for the recession of the US economy.
At this time, the focus of our country's development is to use more central financial resources to promote domestic demand, we need to spend money on the blade.
So how to use more Chinese financial resources to invest in the development of domestic science and technology industries, and even stimulate domestic consumption, drive domestic demand, and consolidate the foundation, this is the top priority.
However, it is worth mentioning that our suspension of gold purchases does not mean that we are not going to de-dollarize.
We can see from our country's latest foreign exchange reserves that our country continued to sell US bonds in June.
Next, let's talk about India.
It can be said that India is on one hand constantly pleasing the United States, and on the other hand, it is preparing for a comprehensive de-dollarization.
Indian brothers are really the smartest people in the world!
Let's first look at a set of data: According to the data from the Indian Bureau of Statistics, in the fiscal year of 2023-2024, India's GDP actually increased by 8.2% year-on-year!
Of course, this is mainly due to the strategic change of the US-India industrial chain reshaping, coupled with India's huge domestic demand market, India is gradually becoming an important base for global manufacturing!
Needless to say, this is the result of Modi and Lao Bai drinking a toast together.
On the other hand, after making money, India uses the money to buy a large amount of gold.
In June, India increased its gold reserves by more than 9 tons, and now India's total gold reserves have reached 841 tons!
It is worth mentioning that India is the first time in 30 years to transport 100 tons of gold stored in the British Treasury back to the country.
This significance is extraordinary.
So why did India do this?
The root cause is that under the current economic environment, India is too dependent on the US dollar economy, and its own anti-risk ability is not strong enough.
At this time, India's avoidance of the risks brought by the US economic recession is far greater than the risks brought by the gold premium.
As I said in the last program, if the US economy declines, these developing countries will definitely be the most injured.
Especially countries that are very dependent on the US dollar economy, such as Vietnam, India and other countries will be the first to be hit.
India will certainly understand this.
It can be said that India's move is simply two-faced.
In the face of the global pessimism about the US economy, India is on one hand trying its best to please the United States, and on the other hand, it is buying a large amount of gold and transporting it back in advance, and is preparing for a comprehensive de-dollarization.
So far, you have to admit that people's wisdom is not acceptable!
Of course, the different actions of China and India release the same signal.
That is, everyone is trying their best to reduce the harm of the US economic recession to their own countries, and the pace of de-dollarization will not change.
It's just that one represents a major economic body, and the other represents an emerging economic body.
So far, it can be said that the process of global de-dollarization is accelerating.
What do you think?