China Metal Syndrome. Manic Metals Report 10/08/2024

In the movie Oliver the little orphan dared to ask for more but was denied. The Chinese Stock market also asked for more, and did not get it, leading to a reversal in Chinses stocks and copper the Chinese bell weather.  Gold that saw weakness yesterday from a rush to industrial metals and now back. Gold war premium is being built and central bank buying remains strong but China is on hold.
Kitco reported The People’s Bank of China (PBoC) chose not to add any gold to its reserves in September, bringing the streak of inactivity to five months in a row, according to official data published Monday.
China’s gold holdings remained at 72.8 million troy ounces, or 2063.84 metric tonnes, at the end of last month. However, the value of its gold reserves rose to $191.47 billion as of Sept. 30, up from $182.98 billion at the end of August, because of the yellow metal’s appreciation. The PBoC had purchased gold every month for 18 consecutive months until they first refrained in May.
Gold also saw weakness on fear that that the Fed will not go to 50 basis point cut, That caused strength in the dollar and hurt gold.
As we have talked about, metals are going to be needed to appear the economy of the future with official intelligence, crypto currency mining and the energy transition.
Reuters reported that “The global energy transition was the dominant theme at this year’s London Metal Exchange (LME) Week, the annual gathering of the world’s metals producers, users and traders.
True, the metallic path to net zero is proving much bumpier than expected. Prices of battery metals such as lithium, cobalt and nickel have bombed over the last year. Too much supply has been brought on too quickly just as electric vehicle sales have hit a slow patch.”
Reuters went on to say but the promise of a future boom is undiminished. Many key energy transition metals are expected to face supply shortfalls this decade, some as soon as this year, according to Bloomberg NEF.
The research house predicts the world will need three billion metric tons of metals between 2024 and 2050 to meet global emissions targets. The figure doubles to six billion in a net zero scenario. It’s an enticing bull narrative, particularly when the current reality is one of weak metals demand as China’s growth engine misfires and Europe’s manufacturing sector contracts.
Kind of interesting today if you look at platinum Palladium aluminum silver, they’re all in the red and the only metal that’s in the green today happens to be gold so that’s quite a reversal from what we’ve seen over the last couple of days.
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