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Two Ways: China Puts Pedal to Yellow Metal


Strengthen your portfolio in good times and bad.


China Pumps Gold

News of China's gold reserves increasing 76% since 2003 sent the yellow metal to a 3-week high. According to Bloomberg, the country now holds 1054 metric tons, making it the fifth largest national holding. The United States leads the category with 8134 tons, followed by Germany, France and Italy. At $1.95 trillion, China also has the world's largest foreign exchange reserves and is the primary overseas holder of US government debt. Premier Wen Jiabao recently expressed concerns that a weaker dollar would hurt China's holdings of US Treasuries.

See The Next Great Bubble: China by Professor Vitaliy Katsenelson.

From the Bull Pen: Gold bulls can look to the Gold ETF (GLD). A sell stop can be set near $87. The Goldminers ETF (GDX) is also an option; a sell stop can be set near $32.

From the Bear Cave: The Dollar Index (DXY) has broken its uptrend since March. Bears can use the Bearish Dollar Fund (UDN); a sell stop can be set 2% below entry.

Quick Check Around the World

Asian trading closed with the Hang Seng 0.29%, Nikkei -1.57%, India 1.74%, Shanghai -0.62% and Taiwan 0.09%.

Glancing towards Europe, we see the CAC 1.56%, DAX 1.54%, FTSE 1.74%,

As of 8:10 AM EST, S&P Futures are trading +4 to 852.00, and Nasdaq futures are +11 to 1353.00.

A Look at Commodities

Over in commodities, crude oil is trading +0.78 to 50.40 while gold is +4.1 at 910.70 this morning. Silver is -0.050 to 12.750 and copper +1.15 to 200.35.

The dollar index is -0.8150 to 85.0600.

On the Radar


08:30 Durable Orders -1.04 %
08:30 Durable Orders ex Auto -0.8%
10:00 New Home Sales 337k .

Freak Friday! Good luck and have a great weekend!

In memory of our fallen friend and trusted colleague, Bennet Sedacca, 100% of the donations made to the RP Foundation through April will be channeled to philanthropic endeavors consistent with the RP mission, working closely with the Sedacca clan in the distribution of those funds. We thank you kindly for your support as we strive to effect positive change in the lives of children.

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Position in GDX

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