➡ This Arcadia Economics article discusses the impact of China’s economic situation on the gold market. It suggests that China’s struggling economy and potential future stimulus measures are positively affecting the gold market. The article also hints at a possible connection between Elon Musk and a Twitter account that has been making gold-friendly comments. Lastly, it analyzes various market trends and their implications, such as the need for China to devalue its currency and the correlation between the gold market and the Hang Seng index.

➡ The article discusses the relationship between China’s stock market and gold prices. It suggests that China’s market doesn’t affect gold prices, and that gold might even increase if China stimulates its economy. The article also mentions that China’s market is currently weak, indicating a need for economic stimulus. Lastly, it touches on various global events and their potential impact on the economy and gold prices.

Today is all about China and a perspective on what’s going on there and how it can, is, and will affect gold going forward. Welcome to the Morning Markets and Metals with Vince Lancey, where each morning Vince brings you the financial and precious metals needs to get you ready for your day. And now, here’s Vince. Good morning, everyone. I’m Vince. Happy New Year, January 2nd. And we’re going to talk about gold as an indicator of things to come in China. Today is all about China and a perspective on what’s going on there and how it can, is, and will affect gold going forward.

Silver as well, which is what you want to see. Let’s start with the markets. The dollar is, I’m sorry, the 10-year yield, the bond market 10-year yield is 451 down 5. The dollar is up 28, and gold is strong today. That’s a good sign. It has to be 559.35, up 46. American exceptionalism, the VIX is 1712, 1714 down 20. Gold is 26.42, up 18. Silver is 29.32, up 42. Copper is 399, up, I don’t know, less than a penny. WTI is 7290, up 77. Natural gas is 373, up 3. Bitcoin up 2596, spot 8.

Ethereum, 3.4,000, up 120. Palladium, platinum, up 10, up 19, 918, 922, respectively. Gold, silver, 90, after the last couple days, selloff and silver, and grains are all up a little bit. Over a percentage point, I’m sorry, grains are all up uniformly, not a little bit. Okay, there’s our homepage, the quick note on China’s plan, another step higher in 2025, and this is an exclusive. It’s not gold directly, but about six months ago, eight months ago, we noticed that there was someone on our X platform Twitter feed named Adrian Dittman, and Adrian has some striking similarities in his post style to Elon Musk, and he was pronounced in our feed.

So we paid closer attention, and he made a couple comments that were very gold friendly, without actually recommending to buy gold. And so that made us follow him to see what he was about. And it turns out there are strong rumors and strong circumstantial evidence that this is Elon Musk. We revealed that in the context of gold to people months ago, but a couple days ago, it’s becoming the mainstream media. And well, anyway, whether it’s him or not is irrelevant. But Elon Musk has synthesized the h1b problem, right, the division, it’s causing with this anonymous account, and his ability to make memes.

And, well, anyway, it’s just a comment on Elon Musk’s ongoing mainstream media abuse. And there is another post in it that we unlock from premium that’s about gold. All right, so moving to the main story. The story is, well, let’s start with the facts. All right. So here’s the market. Start with China. This is basically the Hang Seng index, right? And this is today, and it’s down substantially. And this is when they started their version of a stimulus, a bazooka, or depending on how you look at it. And this is the effect and some after after effects, the RR that was going to be anticipated.

And this is the sell off today. So why is this market weaker today? And why is everything doing what it’s doing on the right? Well, they’re all they’re very closely tied together right now. Okay, so the long and short of it is I think the market I know the market is anticipating more stimulus from China. And there is now a new conjecture in the market that China is going to hold off on their extra stimulus until after the after the inauguration, to see if Trump follows through on his tire. So they want to keep it in reserve and keep their power dry for that.

That’s the story there. So and that’s and that seems very accurate. So I think let me pull that up again. I basically just summarized this whole part here. Okay, China is expected to do more stimulus. The market is reflecting a disappointment today in the fact that it doesn’t seem like they’re going to do that. They’re going to hold off until they figure out if Trump is actually going to do the tariffs that he says he’s going to do. And their stock market has dropped because of that. Their bond market has rallied driving their yields even lower.

And the gold market is higher. Okay, and this is all going to tie into gold, right. So gold is telling me that they’re going to have a stimulus. All right, so we’ll get into that in a second. But what I just explained to you is the reason and explanation and what’s happening today. But what’s been happening for months is China is, I don’t know if the word struggling, but to outsiders, it looks like they’re struggling to get their economy going. And that has actually been a positive for gold. You know, there’s observable data that they’re on the path that Japan is on.

There are important differences between their economy and Japan’s economy. But nevertheless, the data says what it says. That’s me summarizing the whole thing. What I want to get to next is the effects of this delay, right. So let’s look at a couple of charts before we bring this to gold. This is their bond market. Their yields keep dropping as people say, oh, the economy sucks, throw money into bonds, right. And so when their bond yields drop, it’s disinflationary, deflationary, very similar to the whole lost decade concept out of Japan because of their real estate market.

This also, if you’re in China, right, and you have a taste and an understanding of gold and appreciation for gold as a hedge for extreme inflation, as well as an economy that’s going to crap or a political or geopolitical unrest, you’ll buy gold. So as yields go lower, that’s supportive for Chinese buyers of gold, right. The reaction to that, which is China stimulus, is also supportive of gold outside of China, I mean, inside of China as well. But so disinflation in China is stabilizing for gold and printing in China is bullish for gold.

So there’s the Chinese bond market. As bond yields go lower in China, that is concurrent with stocks going lower. Now, this is a daily chart. So the stock market in China, when they had this stimulus higher, and the market just took off higher, the bond market started to yield, started to creep higher. So people were taking their money out of bonds, out of safety, and pulling it into stocks. But it’s not enough. Going back to that chart again, as you can see, it’s stabilized for a while there. And now it’s, you know, crapping out again.

So the bond market is warning that China hasn’t done enough. Okay, so there’s your bond-stock parallel. Here’s the stock market again, on a weekly chart, and the reddish line is the currency. And when you have a gap between those two, stocks are higher than the currency. Well, that’s an implication. It’s an implication that devaluation is what’s called for in their stock market, so in their currency market. So this would imply to analysts that China needs to weaken the yuan. Now, Western, you know, analysts, Western banks are like, yeah, they need to weaken the yuan.

So it’s a sign that money’s coming out of China. Again, Western money, or whoever’s not in China themselves. And that’s bearish for their market. You need to weaken the yuan to encourage, believe it or not, to encourage more trade, and they need to devalue against the dollar. That’s what this would tell you. And it has been my opinion, in my comment, that they’re not devaluing against the dollar. They’re devaluing against gold. And the dollar, as a result, will devalue against gold. But that brings me to the next chart. So this chart tells you that as well, all right? This chart confirms the other two charts.

All right. This is the gold chart on the left, and on the right is the stock market, the Hang Seng. Now, you can see the general trend higher in gold is higher in the Hang Seng. And lower in gold, lower in the Hang Seng, seems to be at least loosely correlated with lower in gold. So now it’s story time. Now I’ll tell you a couple things, using a couple important signposts that we all understand. This is not rocket science, but it is focused observance. All right. On the right-hand side is the Hang Seng.

On the Hang Seng, that is the week before they announce stimulus. Now, move your eyes to the left, and gold is already starting to rocket. Gold leads the Hang Seng higher when they stimulate, because gold leads the stimulus, because traders in China know it’s coming and they buy gold. All right. So on the way up, gold leads. Okay. That’s your takeaway. Gold leads when expectations of China stimulus are coming back into the market. Now, today’s activity in gold tells you that. Second week is the week of October 7th, which is an extremely spiky and sell-off high in stocks in China, because for whatever reason, they don’t think it’s enough.

Plus, this was a lot of this upswing was a short squeeze. There were a lot of shorts in Chinese stocks then. Now, bring your eyes to the left. It doesn’t affect gold. See that? Gold does not drop when the Hang Seng drops. So China stocks will follow gold higher when China looks like it’s going to stimulate, and China stocks will not lead gold lower when they kind of crap out like they did here. That’s the behavior that’s been going on for, you know, a couple years more or less than I’ve been following.

All right. Next chart. What about other events? All right. So now we have the week of the election. Now we go to the left. On the chart on the left, you have the November 4th week, which is the week of the US election. Gold makes a high and proceeds to drop for that week and the next week pretty steeply. Now, what about China? Well, the China stock market makes a high, closes on the highs, and then really craps out. So you say, what about the relationship there? Well, the relationship there is, on the left, gold did what it did because the election was known.

It was made certain the end of the American Republic did not happen. And so people in America sold their gold. Okay. The right, China stocks crapped out because Trump won. And Trump wins. That’s tariff troubles for them. All right. So there is no correlation between China stocks and gold in this chart, in this example here. So there’s nothing going on there. Now I’ll spell it out for you. On December 9th, I don’t remember what happened that week. I can’t believe I can’t remember, but I’m a little bit overwhelmed this morning. The Hang Seng spiked as well as gold did.

And then after that, it sold off hard and finished a week quite weak on the week. So I would say to you that gold and stocks worked weaker on some event that happened during this week, which brings us to now. Now you have a situation where in the small right-hand side, you have a day where China stocks are opening up like almost 3% lower. They were down almost 3% today. It’s like their worst opening in like a billion years. And gold is strong, remaining strong, and actually was stronger an hour ago. So it’s been going up with a stronger dollar, with strong stocks, and no real feeling that the US is going to ease anytime soon, anytime aggressively soon.

So what does this mean? Well, first of all, it means that China’s economy, China’s markets are telling you that China needs more stimulus, which is why the US stock market is up, which is why the dollar is up. This is the American exceptionalism kicking in again, because even though it’s probably a sell to sell stocks after the inauguration at some point, not today. So it’s kind of like a bounce of a bounce, bounce of rejection. But gold is strong. And this is quite surprising that gold is stronger coming out of the gate with China’s stocks lower.

So it would look, I’m looking for reasons to get short gold this time of year. And I’m not finding them yet. I’m not telling you to get long, and this could be very short-lived. But observably speaking, if China’s stocks are weak, and we know that they don’t really take down gold, but gold is now up, well, then maybe the cycle is wrapping to the point where China might actually stimulate. So China’s markets are telling you it needs stimulus, and that they should not be backing off on this RRR thing, which is a recalibration of their reserve requirements.

Anyway, so long story short is people are going to be talking about this week, China, right? China has troubles. I think they do actually. It costs a lot of money to support every other economy out there. And they’ve actually been supporting their Russia’s banker. They’re supporting a lot of economies out there. Anyway, I want to keep watching this, right? I’m a tape watcher. So if China’s stocks keep dropping and gold keeps rallying, then it’s on, right? But if China’s stocks keep dropping and gold dips or gold flattens out, then I know this is short-lived, and it’s just the end of buy season coming in.

Anyway, that’s the long story. Sharing it with you, because that’s where my analysis is right now. User analysis, Elon Musk’s ongoing fault, ongoing mainstream media abuse. 2025, debase or die. That’s actually a pretty good post about, basically, it’s about the debt. Either we get the debt down or the dollar will have to weaken. It’s a story that you all know, but there’s some nice charts in there. Top 15 coin controversies. That’s from Scottsdale’s writers. It’s actually, look, all my non-metals friends like that. This is where the US is shipping dollars to people in coins for dollars, and how people are using credit cards to get the points, and buying $500, and then just swapping them out.

It’s government’s idiocy at its finest, and it includes the confiscation of gold in 1933. Is Janet Hill in China a treasury hacker? Yes, she is. All right. Market news, some bad news. I mean, the terror attacks, there were two of them that we can see in the US. One was in New Orleans by a terrorist, supposedly domestic-born, supposedly ISIS-related, supposedly allegedly or reportedly part of the US military. So not working alone. And then a Tesla Cybertruck, which was parked in front of Trump Tower in Las Vegas, blew up, which is stupid because the car is made of steel.

So if you’re going to put a bomb in a Tesla and blow it up, that’s like putting a bomb in something that will catch the explosion. And then there was a terror attack in Europe as well, and then we had the plane crash. So pretty bad stuff. So there you go. And then there’s the regular news. In premium, Goldman Economist answered 10 questions for 2025. It’s nothing exciting about it. It’s a good piece. There is some stuff that’s, I think, interesting, and I want to draw your attention to it. One of the questions they asked is, where is that? Will net immigration turn negative? People are talking about that now.

It’s in the insight, guys. One of the things they say is, changes to immigration, trade, and fiscal policy under the second Trump administration will likely be meaningful, but stop short of some of the more dramatic proposals. We expect net immigration to slow to about 750k here. Now, there are plenty of really good charts in here. Here’s one of them. Let me read these words before I blow up the chart. It’s a crazy question for them to ask. Why are we not penciling in even more deportations and even lower net immigration? While we expect deportations to run at the top end of it slightly above the historical range of recent decades, exhibit 14 and 15, legal and logistical constraints on executive authority and enforcement capacity limit the scope of a more dramatic increase.

Oh, well, it doesn’t make it any bigger. There’s probably not going to be a lot of people getting deported. I think that’s the takeaway, but we have the full report and take a quick look at the markets. Gold’s up 15 and solid. Silver’s up 36 and solid. Let’s see how this week plays out, how the weekend is more important than how the week opens for gold and silver. Same thing for China as well. All right. Have a great day. Well, thank you to Vince and thanks to everyone watching at home. Sure. Hope you enjoyed the show and we appreciate you being here.

And before we wrap up, I’d also like to thank Fortuna Mining who kindly brought us today’s show. And Fortuna did have some drill results from their Seguela Mine where they extended their kingfisher deposit with a drill intersect of 4.1 grams per ton gold over 15.3 meters. And they also averaged 3.3 grams per ton gold, 150 meters further along strike. And to find out a bit more about the drill results from Fortuna, well, we have a video we posted. Gives a brief recap of that and that one is coming your way now.

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