A-Mark Bullion Update
In the overnight trading session, the People’s Bank of China allowed their currency to depreciate by 2% against the USD, the biggest one day loss in two decades.  Weak trade numbers which have been exacerbated by a strong currency in the face of weak global demand for its exports seemed to be the final straw for the PBOC. Chinese exports for the month of July dropped over 8%, worse than expectations for a 1% fall and the poorest figure in four months. The move by the PBOC rattled the currency markets and US equities are down over 1% at time of writing as participants attempt to digest the Chinese currency news. Gold had a volatile overnight session and the active December gold contract on the Comex is having its biggest volume day yet with over 184,000 lots traded thus far. Gold’s reaction was slow to the currency devaluation but it ultimately moved from sub-$1,100 all the way up to $1,120. The jump higher was met by heavy selling though and it has since retreated. The 2% weakening of the renminbi means that gold (not factoring in gold’s own price moves) for the Chinese is now 2% more expensive than it was yesterday. Chinese gold buying overnight took a hit as the Chinese were instead happy to sell into the rally. The story of currency devaluation is generally gold bullish but this time it may turn out to be negative in the short term as further Far East selling emerges.