South China Morning Post/Neal Kimberley/7-13-2022
“The US Federal Reserve is definitely going to continue to tighten its monetary policy. Beijing is definitely going to do everything it can to keep the Chinese economy on track. If markets accept those two propositions, there are profound implications across asset classes that are not yet properly reflected in pricing.”
USAGOLD note: Much of the weakness in commodities has stemmed from the belief that Chinese demand would decline as a result of covid lockdowns. Kimberley sees it differently. He says China’s new stimulus package, which focuses on infrastructure, “is expected to give strong support to commodity prices and market sentiment.” Such thinking could have a spillover effect in the precious metals markets. He says that the absence of high unemployment numbers in the face of Fed tightening and China’s stimulus plan “does not bode well for recession bets.”
