On Monday (July 27), the Asian market saw a massive explosion in precious metals. Spot gold broke through its historical highs and kept setting new highs to above $1,940. At the same time, silver soared by 7%.
Today the market witnesses history again! Spot gold maintained a fierce offensive at the opening of the market. The bulls broke through the two major barriers of 1910 and 1920. After breaking through the historical highs, gold rose further and just broke the 1940 barrier, approaching 1945 US dollars.
At the time of the gold outbreak, silver also skyrocketed, and the price of silver rapidly expanded to 7%, just breaking through $24 per ounce, the first time since September 9, 2013.
On this occasion, there was an update on the Sino-US situation. At 10 o’clock in the morning on July 27, the U.S. Consulate in Chengdu was closed in accordance with Chinese requirements. The Chinese competent authority then entered from the main entrance and took over.
At around 6 o’clock on July 27, the US Consulate in Chengdu lowered the American flag. It has been less than two hours since the official 72-hour closing notice was issued at 10 o’clock on July 24. At present, the consulate has been under full martial law.
Last week, the situation in China and the United States escalated in an all-round way. China took a reciprocal countermeasure against China’s 72 hours to close the Consulate General in Houston and decided to abolish the US Consulate General in Chengdu.
The Ministry of Foreign Affairs of China notified the U.S. Embassy in China to revoke the license for the establishment and operation of the U.S. Consulate General in Chengdu, and put forward specific requirements for the Consulate General to stop all operations and activities.
The Ministry of Foreign Affairs of China stated that the current situation between China and the United States is something China does not want to see, and the responsibility rests solely with the United States. “We once again urge the United States to immediately revoke the wrong decision and create necessary conditions for the return of bilateral relations to normal.”
According to Bloomberg News, after the establishment of diplomatic relations between China and the United States, with the increase in economic, cultural, tourism and personnel exchanges, the United States and China have established consulates in Houston, San Francisco, Los Angeles, Chicago, and New York. Opened consulates in Guangzhou, Shanghai, Shenyang, Chengdu and Wuhan in China.
Hong Kong’s “Asia Times” online article analyzed that the United States accused the Chinese Consulate General in Houston of “acting as a front desk for systematic theft of American intellectual property rights” in the eight southern states of the United States. In response, China closed the US Consulate General in Chengdu. Part of the reason is that “this city with 16 million residents is the center of China’s military weapons research and production, and it is also an emerging IT center”, which contains hints of tit-for-tat.
Since the Sino-US trade war, relations between the two countries have deteriorated sharply due to a series of issues, including the new crown epidemic, Huawei, South China Sea territorial claims, and Hong Kong’s national security law. With four months to go before the U.S. election, the candidates of the two parties seem to be competing in campaign campaigns to see who is the toughest against the Chinese government.
Analysts pointed out that as the U.S. election approaches, frictions between China and the United States may appear in various fields, and the market will also assess the subsequent impact, depending on how China and the U.S. balance the conflict.
A Chinese official with knowledge of the situation told Reuters, “This is different from a pure trade war, and it will not be able to reverse the situation immediately through a certain opportunity as it was then.” The move to order the consulate to close has greatly affected the relationship between the two sides. After the scale deteriorates, and the confrontation in the diplomatic field, the impact will be very wide.
He also pointed out that under such circumstances, the mistrust between the two parties will usually last for a long time. Even if the two parties suspend the move, it can only be a timeout of tension, and it is difficult to achieve a breakthrough in the relationship in a short time.
According to an unnamed Chinese official, the situation is severely escalated compared to previous bilateral conflicts, and countermeasures will escalate accordingly. When the situation is fully tense, the economic and trade fields may be affected again.