My gut says China has changed their stance on Gold. They are smart enough to move without showing the market their intention. And retail has bought the 4000 break, hoping for a rebound. In such a scenario, 3000 becomes more likely than 5000. Purely based on positioning and the hope-fear cycle.
Official People's Bank of China (PBOC) reserve numbers are reported with a lag and reveal nothing about execution timing, OTC swaps, or sovereign wealth fund (SAFE/CIC) hedging. If Beijing wanted to pause, lend out metal, or quietly distribute into retail strength, the market would not see it in official prints until weeks later.
When spot gold first broke below $4,000 in late October, media reports documented record crowds of retail dip-buyers - describing Shenzhen's Shuibei bullion district as "more crowded than a vegetable market" - while Western retail investors stepped into gold ETFs expecting an immediate rebound.
Instead of bouncing cleanly, gold rejected $4,150 and rolled over below $3,900, leaving that late-$3,900/$4,000 cohort underwater.
Germany’s social contract depends on businesses being competitive enough to pay for it. Mercedes’ investment freeze exposes what happens when wages, working hours, and job guarantees are negotiated as though customers have also signed the agreement.
They haven’t, and they can buy elsewhere. If European companies cannot compete with Chinese manufacturers and American technology businesses, the profits supporting generous benefits and public services will shrink. On the other hand, asking employees to work longer cannot compensate indefinitely for weak products, expensive energy, or missed technological shifts (ie., from mechanical to electrical stack).
Management and government have obligations here too.
The dangerous outcome is a settlement that preserves every existing entitlement while investment quietly moves abroad. You can win the negotiation over how prosperity is distributed and still lose the business that produces it.
Winter is slowly beginning in Europe.❄️Most of Scandinavia is already covered by a continuous layer of snow. Snow cover is significantly more extensive than in the past two years (see the comparison from our archive). Over the past six years, snow cover in Europe at this time of year was more extensive only in 2023
Source: Ventusky (X)
China’s real estate investment has fallen by half. For this sector, the price of ordinary rebar is crucial, and we have a clear downtrend.
Source: Lukasz Skiba (X)
"Steel will tell you when to worry about China". HRC – hot-rolled coil – is the foundation of industrial manufacturing and the automotive sector. Its price is scraping the bottom, while vehicle production in China has already fallen by around a million units from its peak. Domestic demand is disappointing because the Chinese consumer is in the midst of massive deleveraging.
Source: Lukasz Skiba (X)
The obvious question that probably matters most for the US economic and market outlook is how sustainable current levels of AI-related capex are. You can see below that, as a share of US GDP, business investment in equipment and intellectual property is above dot-com levels.
We think the pace of capex growth slows next year, but that AI capex continues to expand. Beyond 2027, though, there are potential risks to the AI capex outlook. And of course, next 12-month S&P 500 forward earnings estimates already include earnings estimates up to almost the end of 2027.
So as we move into 2027, the outlook for capex in 2028 is going to become increasingly important for the market, if not yet the economy.
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