China dumped more US Treasurys in April, selling off another $7.5 billion in US debt, according to the latest US Treasury Department data. This follows on the heels of the biggest US Treasury selloff by the Chinese in nearly 2 1/2 years in March.
Over the last two months alone, the Chinese have dumped some $17.5 billion in US debt.
In an opinion piece published yesterday, a Chinese government newspaper called for the international community to find alternatives to the global dollar system and warned “capricious actions” by the United States government could “ruin the future of the dollar itself.”
This is yet another sign that the world is getting tired of the US weaponizing the dollar.
A European payment system set up to circumvent US sanctions on Iran will be ready soon, according to German Foreign Minister Heiko Maas.
This is yet another move in a global effort to minimize dependence on the US dollar.
China added to its official gold reserves for the sixth straight month in May as it continues efforts to minimize exposure to the dollar.
The People’s Bank of China increased its gold reserves by another 15.86 tons last month, according to data released by the bank on Monday. That raises the official Chinese gold reserves to 61.61 million ounces (1925.26 tons).
As we’ve been reporting, central banks around the world are aggressively adding to their gold reserves. During an interview on RT’s Boom Bust, Peter Schiff talked about this move toward gold and said these central banks are preparing for a dollar crisis. The world is looking for an alternative to the dollar and the best alternative is gold.
As we’ve been reporting, a number of central banks have been aggressively adding gold to their reserves over the last several years. Globally, central banks accumulated 651.5 tons of gold last year. It was the highest level of annual net central bank gold purchases since the suspension of dollar convertibility into gold in 1971, and the second highest annual total on record. Last week, Serbia and the Philippines joined the race for gold.
A move to minimize dependence on the US dollar, especially by countries like Russia and China, is driving this central bank gold-buying spree. Peter Schiff recently appeared on RT’s News with Rick Sanchez to talk about it.
The following is a market update as it related to precious metals prepared by SchiffGold intern commodities analyst Jason Mezhibovsky.
Silver/Gold Ratio Continues to Diverge
The silver/gold ratio continues to diverge, favoring silver as relatively cheap compared to gold at the moment. This presents an attractive opportunity for silver. The white metal could benefit, along with gold, as a “safe haven” asset in a weakening economy with plenty of uncertainty surrounding the trade war and Brexit.
The following is a market update as it related to precious metals prepared by SchiffGold intern commodities analyst Jason Mezhibovsky.
Last week, the Federal Reserve released the minutes from its Federal Open Market Committee meeting earlier this month. There weren’t any big surprises. The FOMC indicated that it would continue to take a “patient” approach to its monetary policy, basically stating that it is in no rush to adjust the policy either way for now.
Fed officials seemed to agree that this “do-nothing with interest rates” approach could continue for “some time.”
Russia once again added to its growing gold reserves in April, buying another 15.55 tons of the yellow metal. According to a press release from the Central Bank of Russia, it now holds 2,183.46 tons of gold.
Russia has expanded its gold holdings by 71.53 tons through the first four months of 2019. Russian gold reserves increased 274.3 tons in 2018, marking the fourth consecutive year of plus-200 ton growth. Meanwhile, the Russians sold off nearly all of its US Treasury holdings. According to Bank of America analysts, the amount of US dollars in Russian reserves fell from 46% to 22% in 2018.
In an appearance on RT, Peter Schiff said he thinks the Russians are preparing for an impending dollar crisis.
The following is a market update as it related to precious metals prepared by SchiffGold intern commodities analyst Jason Mezhibovsky.
Trade War
Although some pressures on US equities from the trade war have been eased, the S&P 500 is down about 3.8% since the end of April. Stocks rebounded Wednesday with the news that the US and China seem to to be making some progress with trade deal talks and that the US may delay some auto tariffs on the EU. The Dow was up 115 points and the S&P 500 picked up 16.55 points Wednesday. But stock markets still have not recouped all of their losses from the pressure faced these past two weeks.
