Who will rescue emerging countries from falling gold? what is the truth behind the scramble to hoard money?

SMM September 17 news: gold this wave of decline lasted for almost half a year!

Trend chart of American gold in the past half a year

Experiencing the feeling of falling like a flood, he was suppressed by Brin along the way, and there was little resistance. In recent days, the decline has rebounded slightly, taking advantage of the weak dollar to think that it can rise, but it is still overvalued! K-line bouncing in the middle of the track for a few days, more empty competition, rising momentum has been insufficient, when gold is waiting for US dollar sanctions. On September 27, the third meeting of interest rates in the United States this year will be held. The Fed has a probability of raising interest rates by more than 95%. Without any major surprise, a rate increase in September is almost certain, which is also widely expected in the market. The data from the United States this week is also surprisingly small, and the biggest data market is likely to be the initial jobless claims on Thursday, and everyone seems to be waiting for the high-profile decision on US dollar interest rates next week. Then the trend of gold will be a vast drama.

Gold is known to be risk-averse, due to its own scarcity. The trend of gold and the US dollar is about 70% opposite. The strength of the US dollar this round is the direct reason for the continuous decline of gold, and the strength of the US dollar has led to the sharp depreciation of other currencies, and the currencies of many countries have hit record lows. So some emerging market countries began to hoard gold actively, including Russia, Turkey, India and so on. Russia's central bank has reportedly bought 106 tons of gold so far this year, bringing its total gold reserves to nearly 2000 tons. Russia bought 26.1 tons in July alone, surpassing China's gold reserves. Turkey, which bought 29.8 tons of gold in the first quarter of this year, was the second-largest buyer of gold, and in August the Bank of Turkey allowed gold to be used in foreign exchange and local swaps, hoping to reduce its dependence on the dollar. India's gold reserves rose 6. 8 tons to 573.1 tons in July. In addition, demand in India, the second-largest consumer of gold, fell 12.9 per cent in the first eight months of the year, but gold imports rebounded in August and demand is expected to improve for the rest of the year as farmers' incomes rise.

There is another piece of data to pay attention to, and that is the volume of trading.

The chart above shows the monthly trading volume and monthly K chart for a year and a half, with surprisingly little trading volume in the six months in a row. This is because the US economy has been booming during this period, the dollar index, GDP, and stock markets have all begun to rise, the unemployment rate has stabilized at 4%, and the stable economy has made Wall Street uninterested in gold and gradually began to give up buying gold. SPDR Gold Trust, the world's largest gold ETF fund, has been selling or not buying for months in a row and is a microcosm of Wall Street's attitude towards gold.

SPDR has held positions for the past two months

Other countries, under increasing pressure from the rising dollar, have embarked on the road of raising interest rates. In order to avoid economic instability caused by currency depreciation and maintain the stability of their currencies, gold has been given high hopes. Although gold is not as liquid as bonds, in the event of a crisis, such as the collapse of the current global trading order, precious metals will retain the function of a means of payment in any possible chaos. Keith Neumeyer, chairman of Vancouver development company First Mining Gold, said: "I am sure that when governments around the world need to get out of debt, a global reset will happen and they will link everything to gold. That is why Russia is hoarding gold because it knows what will happen to the world in a few years' time. "