In our late September Top Mining & Crypto Report, we made the case that the dollar was about to hit a dead end against its rivals including precious metals. While we were too optimistic about the prospects for the yen, the dollar has indeed fallen against other major currencies since the report, notably the Chinese renminbi and euro (yes it is true). On a composite basis, the broad dollar index has failed to move above its fall 2023 highs despite the weak yen. Most importantly, the dollar peaked against gold within days of our September report.
Anthony Blinken and Xi Jinping in Beijing
We continue to hear talk of an impending devaluation of the Chinese currency against the dollar. This would be a headwind for commodities and potentially gold. However, we expect China to resist devaluing its currency unless it is hit with tariffs against key exports by the European Union or the United States.
