The yuan collapse sends China physical gold premium soaring to three-year highs, according to Bloomberg: Two weeks ago, China joined the long procession of countries to declared war on cash and gold. The result has been a new all-time high in the bullion Dealers shops of $40 dollars over spot on the main land of China.
An astronomical amount by any standards. Interestingly, only a small fraction of this monumental amount has been allocated to gold investments. Here below is the record of gold investments since 1980. To be sure a brief history of gold investment demand will indubitably put our analysis into sharp perspective.
The selling for gold or silver may not be over just yet and the pressure could increase further if market participants grow more confident in foreseeing a rate rise in the United States before the year is out. These buck-denominated and noninterest-bearing assets tend to weaken when yields and the dollar are both rising.