China’s “Golden Week” (which closes the markets in China) is not until next week, but it’s quite possible the effects are coming early this year. Here’s a look at how the week long holiday in China is prime-time for some gold smashing…
From Zero Hedge
If you are a precious metals investor then you may be wondering why the price of gold and silver has been slammed in recent weeks… amid ever-increasing nuclear armageddon rhetoric, storms, quakes, floods, and a central bank (that is notoriously bad at forecasting) about to attempt to do something with its balance sheet thathas never been achieved…
The answer is surprisingly simple… China’s Golden Week Holiday.
As SHTFplan.com’s Mac Slavo wrote a year ago, and appears to be proved correct once again… Ask the expert pundits on financial media and you’ll get a swath of explanations for how the strength of the dollar or the improving health of the global economy are to blame.
One could reasonably argue that dollar strength this week could certainly put downward pressure on the gold price. So, too, could one make the point that mainstream perspective is such that the economy is improving, which means investors aren’t in panic mode and have no reason to hold a safe haven asset. But neither of these arguments could realistically lead to the smack down we witnessed this week.
So what happened?
Well known gold and silver analyst Andy Hoffman suggests the answer could be much simpler than we have been led to believe.
There’s no reason… there’s not even a propaganda meme of why [gold has been smashed]… there isn’t even a such thing as negative news for precious metals anymore…
The fact is, [like the last few years, when prices collapsed], China is closed for the week.
One glance at the last few years gold price action suggests he may well be correct…
After this Friday’s close, China will be on vacation for its Golden Week National Holiday and this weakness appears to be traders front-running the traditional chaos that the rest of the world plays when China leaves the playing field.
China will be back in business on October 9th, and that means the Shanghai Gold Exchange, which opened in 2015 to counter Western manipulation of precious metals, will likely help re-balance prices to where they were before this recent takedown.
We could be wrong, but something tells us gold and silver prices won’t stay this low for much longer and that they could well see a complete turnaround when China reopens on October 9th.