Unlike the Fed and ECB, the People’s Bank of China is in an easing cycle already. This week it cut the amount of cash lenders must hold in reserve for the second time this year, a move that will help banks support government spending and Beijing’s broader effort to stoke economic growth.
Policy easing is putting pressure on the yuan, which sank to a 16-year low earlier this month. But the PBOC is working hard to push back against the depreciation. It has drained yuan liquidity in the offshore market, making it more expensive for traders to bet against the currency.
Authorities also limited gold imports to reduce money outflows. As the result, gold in China is trading at a record premium to international prices.
What are potential trading implications for this?
[link] [comments] https://www.reddit.com/r/stocks/comments/16j8l2g/chinas_gold_premium/
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