Gold Prices Jump As China Wages Currency War On U.S – What’s Next?

The Aggressive Move by Japanese Authorities Wasn’t the First and Definitely Will Not Be the Last

There is no deny that the Federal Reserve’s inflation struggles this year have dramatically bolstered the U.S dollar – whipping up an inflationary storm across every corner of the global economy.

The U.S Dollar Index, which pegs the dollar against a basket of foreign currencies, has soared to 24-year highs against its major trading partners – since the Federal Reserve began hiking rates in March this year.

This is unleashing, opportunity on top of opportunity for traders – with the emergence of a new global “currency war” – now in plain sight. Central banks across the world are being left with no other choice but to frantically compete with the Fed in order to have the strongest currency.

As a result, there’s really nothing historical you can point to for what’s going on in markets today. Each and every one of these macro-events is fuelling the greatest wealth transfer of our lifetime – presenting savvy traders with back to back money-making opportunities, almost on a daily basis!

Last week, Japanese policymakers were forced to intervene in markets after the yen tumbled past the key psychological level of 150 to the dollar – its lowest level since August 1990.

The Bank of Japan dumped an estimated $30 billion worth of its U.S dollar reserves in a frantic attempt to protect the yen from yet more weakness. The move triggered a flash crash in the U.S dollar, while simultaneously igniting an explosive rally across multiple asset classes that trade inversely to the U.S currency including Precious Metals such as Gold and Silver.

This is the second time Japanese policymakers have stepped into the market since September to prop up the yen – which has lost almost 30% of its value against the dollar year-to-date because of the widening gap between U.S and Japanese monetary policy.

The yen is the third-largest reserve currency in the world, behind the U.S dollar and the Euro – therefore has enormous potential to move the markets significantly.

Japan isn’t the only country that has seen its currency plummet against the dollar this year.

On Tuesday, China’s four largest state-owned banks stepped into prop up the yuan, which hit its weakest level since December 2007 – by dumping an undisclosed amount of their dollar reserves.

Once again, yes, you guessed it – this intervention triggered another flash crash in the U.S dollar, while immediately sparking explosive rallies across multiple asset classes that trade inversely to the U.S currency including Gold.

With traders already pricing in yet another 75 basis-point rate hike from the Federal Reserve next month – the big question now is who will be next to launch an assault on the U.S dollar?

Only time will tell, however, the one thing we do know is that extraordinary times create extraordinary opportunities and right now, this market is a licence to print money. My advice to you is, do not waste this opportunity!

Gold Price Forecast Video for October 26, 2022

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