China Exports Decline, Time for Gold?

Are we at a pivot yet?

China's exports experienced a significant decline in May, the first drop since February.

• Year-on-year exports decreased by 7.5%, totaling $283.5 billion.

• Experts had predicted a smaller decline of 0.4%.

• Imports also declined by 4.5% in May, totaling $217.69 billion.

• Monthly imports have been declining since late 2022, signaling a broader slowdown in domestic demand.

• Challenges faced by China include a global semiconductor shortage, rising commodity prices, and a slowdown in domestic consumption.

• The impact of the COVID-19 pandemic continues to affect China's trade activities.

• The decline in exports is concerning as China is a major player in global trade and manufacturing.

• The drop in demand for Chinese goods could have implications for both China's economy and global markets.

• The short-term outlook appears challenging, and future trade data will be closely monitored to understand China's economic trajectory and its impact on the global economy.

Is it time to add Gold to you overall allocation?

The news of China’s export’s slowing is a sign of global economic growth slowing as the effects of the Federal Reserves rate hikes of 500 basis points since March of 2022 take effect, coupled this with a slowing housing market, 49% decline in institutional housing investors purchases Year over Year. The agreement to raise the Debt Ceiling will cause $1.4 trillion to flow out of the equity markets as well as other markets. Gold is a safe place to go.

Copper Gold Ratio

As Credit tightens, the economic expansions that we saw from April of 2020 will continue to weaken. Cooper is used as comparison for housing growth. Housing being one of the largest GDP growth sectors.

Gold and Gold Miners