Submitted by Alasdair Macleod via GoldMoney.com,
The Trump shock produced some unexpected market reactions, partly explained by investors buying into a risk-on argument,equities over bonds and buying dollars by selling other currencies and gold.
Following yesterday's unexpected phone call between Taiwan president Tsai Ing-wen and President-elect Trump, which broke with decades of foreign policy norms resulting from Washington's official "One China" stance....
NEW PHOTO: Taiwan releases photo of President Tsai Ing-wen, center, speaking with Trump during controversial call https://t.co/Gt2CAiKH7K pic.twitter.com/RoLIjWlYML
— ABC News (@ABC) December 3, 2016
Ever since the US adopted a “One China” policy after the 1972 Nixon-Mao meetings, followed by President Carter formally recognizing Beijing as the sole government of China in 1978 leading to the closure of the US embassy in Taipei one year later and cutting off relations with Taiwan, when it comes to US-China diplomacy Washington has maintained a steady posture when it comes to Taiwan: non-recognition.
While paper gold traders can't seem to dump the precious metal fast enough, physical gold demand is soaring around the world. India retail premiums are spiking (amid demonetization), local China premiums soar to a 3-year-high (as capital controls loom), and coin sales from the US Mint have risen for the 4th straight month, accelerating post-election to the highest since July 2015 since Trump's victory at the election.
Late last week, we reported that in its latest push to limit and/or halt capital outflows, China unveiled new capital controls meant to stem further capital flight disguised as outbound M&A by clamping down with tighter controls on Chinese companies seeking to invest overseas, intensifying efforts to slow a surge in capital fleeing offshore amid tepid growth and an uncertain economic outlook.