Gold Price Rises After Currency Wars Reignite As China Devalues

Gold Rises After Currency Wars Reignite As China Devalues

China surprised global markets yesterday by devaluing its currency on concerns about sharply decelerating Chinese economy
We were not surprised as had said that this was likely as the Chinese economic numbers are bogus
The devaluation was condemned by U.S. politicians as a grab for an unfair export advantage

Mark Hill via Merck Investments

China’s central bank set its official guidance rate down nearly 2 percent to 6.2298 yuan per dollar
It was the biggest one-day fall since a massive devaluation in 1994
The devaluation hit global equities and U.S. oil prices, with investors fearing a new currency war
Gold prices ticked higher as the move will increase deflation pressures in the U.S. and could lead to the Fed not being able to increase interest rates
As expected – currency wars and competitive currency devaluations are set to escalate once again
Gold, silver and tangible assets will benefit once again