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China Market Continues Unstable

China Market Continues Unstable
Category: Market Reports
Posted: 01-11-2016 10:09:00 AM

After Friday’s strong employment numbers we see the dollar index slightly higher at the moment against the other major currencies.

The Shanghai stock exchange starts off the week down 5 percent as retail investors there continue to sell equities. China’s central bank intervened today trying to strengthen the yuan with hopes this will create some stability in the region. One trader told me that he expects the sell off to continue as the market is already down 15 percent in the first week of the year.

One would think as the Shanghai market continues to fall we would see a rotation into gold as a safe haven for the Chinese retail investor. “Not so fast” said a broker I spoke with this morning, as you look at the pricing landscape of other commodities still retreating. This morning we witness all base metals lower and who could ignore oil down to a 32 handle with no one standing up to support the oil market at this time.

After Friday’s strong employment numbers we see the dollar index slightly higher at the moment against the other major currencies.

Wall Street traders still smiling over Friday’s job numbers as they continue to maintain their bearish stance in the Gold and Silver market. Friday’s job number could help the Fed Governors keep their promise of multiple rate hikes in 2016. Higher interest rates would
make the dollar more attractive to yield seeking investors, but in turn will put pressure on gold and silver prices as most Wall Street traders are predicting.

Early Wednesday morning I will be traveling to see my friends in our Dallas office, so I will unable to give a live market commentary. So instead of asking for coverage, I created what think is an informative and educational piece explaining the workings of the “US Dollar Index.” I hope you will tune in.

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What are your thoughts? China Market Continues Unstable