Gold Closes in on $3,000 as China Sells More Treasuries for Gold

This is a free preview of a paid episode. To hear more, visit vblgoldfix.substack.comHousekeeping: Good Morning. We’re in discussions with sponsors now and are in talks for a syndication arrangement “The Gold reset is a process, not an event”Today* Discussion: China Sells More Treasuries for Gold* Premium: Why Goldman’s $3100 target is Low.Discussion: Why Goldman’s $3100 target is Low.Goldman reiterated its "buy gold" trading stance. The bank emphasized gold’s value as a hedge against risks such as trade tensions, potential Fed policy missteps, and recession threats, noting these could push gold toward the upper end of its uncertainty range.Given that Goldman’s analysis does not factor in the the Chinese insurance industry’s incipient physical off take, we think Goldman is holding back on their bullishness. The higher upside is all but certain if China’s insurance industry buys in.Full Analysis: Why Goldman’s $3100 target is Low. China Sells More Treasuries for Gold* In December, China Sold 57 Billion in US Treasuries and bought $4 Billion of Gold* Nine out of twelve months in 2024 saw reductions in China’s US Treasury holdings.* The data points to a strategic, long-term shift in China’s reserve management approach.The FT’s Take:“China’s holdings of Treasuries have fallen to their lowest level since 2009, as Beijing holds more of its US government bonds through lower-profile accounts and diversifies into alternative assets... Analysts say the change partly reflects China’s desire to diversify its foreign reserves by buying assets such as gold. But they add that Beijing is seeking to disguise the true extent of its Treasury holdings by shifting them to custodian accounts registered elsewhere.” - FT* Full story: China Sells More Treasuries for GoldNews/Analysis:Markets Recap:The S&P 500 closed at another record high on Wednesday. Large caps bested small caps: S&P 500 (+0.24%) vs. Russell 2000 (-0.34%). MSCI Emerging Markets (EEM) and MSCI EAFE (EFA) lost 0.16% and 1.03% respectively.Market News: “Federal Reserve officials in January agreed they would need to see inflation come down more before lowering interest rates further, and expressed concern about the impact President Donald Trump’s tariffs would have in making that happen, according to meeting minutes released Wednesday... The committee noted that current policy is “significantly less restrictive” than it had been before the rate cuts, giving members time to evaluate conditions before making any additional moves.” Source: CNBC- concern?“Apple announced the iPhone 16e on Wednesday, an update to a budget-friendly version of its flagship device. WSJ“President Donald Trump backed a House budget plan calling for a $4.5 trillion tax cut, Bloomberg“UnitedHealthcare is offering certain employees in its benefits operations unit the option to accept buyouts if they quit by March 3 CNBC“Electric truck maker Nikola, which briefly boasted a market value above Ford Motor before its founder was charged with fraud, filed for bankruptcy: WSJGeopolitics/ Politicsvia NewssquawkData on Deck: * MONDAY, FEB. 17 President's Day holiday* TUESDAY, FEB. 18 Home builder confidence index* WEDNESDAY, FEB. 19 Housing starts, Minutes of Fed's January FOMC* THURSDAY, FEB. 20 Speakers and Phila Fed* FRIDAY, FEB. 21 PMIs Final Market CheckPremium: Position discussion