China's Plan to Kill the Commodity Rally

There are three measures to end the rally. [Jeff Clark's Market Minute]( China's Plan to Kill the Commodity Rally By Eric Shamilov, Contributing Editor, Market Minute Commodity prices have taken a step back recently, and investors have noticed… For example, the Bloomberg All Metals Index has fallen 8% in just three weeks since its high on May 31. A lot of this has to with China’s all-out assault on rising commodity prices that began in late May. But, all its policies have really done is break the short-term price trend… setting up a better buying opportunity for the “[trade of the year]( that continues to be commodities. Recommended Link [Jeff Clark has done the impossible]( [image]( He’s found a way to take a seemingly boring stock… and use it to potentially generate thousands – or even tens of thousands of dollars – EVERY MONTH… Without doing anything crazy or complicated. Check out the details right [here]( – including the name and ticker of this stock. [Click here]( -- China’s fear is easy to understand – if higher commodity costs get passed down to consumers, it’ll eventually stall their economic recovery… In just the last three weeks alone, China has announced three new measures to try to end the year-long commodity rally. I talked about the [first one in early June]( with the PBOC’s (People’s Bank of China) announcement in late May that forced financial institutions to increase their foreign currency reserves. This was the catalyst that created a short-term bottom in the dollar and kickstarted the decline in dollar-sensitive commodities like metals. (Jeff Clark’s Delta Report subscribers have benefited from this decline recently, booking a 58% gain on the Invesco DB U.S. Dollar Index.) The other two moves were both announced last week… First, state-owned enterprises were ordered to limit their speculative commodity exposure, and they’ll need to report their futures positions to the state. In a second development, the National Food and Strategic Reserves Administration will soon release state stockpiles of metals like copper, aluminum, and zinc. The anticipation of a short-term supply shock sent a very[bearish]( signal... with copper now down almost 14% from its highs. The problem with China’s approach is that it’s no longer the only buyer that can incrementally move prices… Free Trading Resources Have you checked out Jeff's free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. Commodities Will Move Higher Regardless of China In the past, China was able to dictate where prices went because it had been the incremental buyer of metals, energy, and agricultural products. It’s a large economy that’s been growing by leaps and bounds. But now, demand is coming from elsewhere... This time, policies in the U.S. are creating the incremental demand. For the first time in decades, the economy is undergoing a demand shock from both monetary (money printing from the Federal Reserve) and fiscal stimulus through unemployment benefits, tax credits, and infrastructure spending. By placing stimulus dollars directly in the hands of the consumer, and investing into infrastructure, the U.S. has insured that commodities will continue to move upward – regardless of China’s short-term fix. Yet, metals have suffered a dramatic decline during this stretch… even though this is exactly the sector that’ll benefit most from the continued economic recovery and recently proposed infrastructure bills. For example, platinum has now fallen 20% since early May – when speculation of these announcements from China began. Just take a look… [(Click here to expand image)]( It’s now back to pre-pandemic levels of $1,050/ troy ounce. Considering how platinum is a key metal in the production of electric vehicles – an industry with demand only pointing upward – prices are at a bargain. [[URGENT] MAJOR BUY ALERT]( Given the extreme price pullback in these industrial metals, investors can benefit by getting direct exposure through the Aberdeen Standard Physical Platinum Shares ETF (PPLT). PPLT recently broke through its 200-day [moving average]( but is making a run at recapturing that technical level. Platinum’s pre-pandemic price level should provide strong support, so I fully expect a 10% move higher to retest its 50-day moving average. Regards, Eric Shamilov Contributing Editor, Market Minute Reader Mailbag What do you think about China’s decreasing control over commodities prices? Do you think this recent news is setting up a buying opportunity in metals? Let us know your thoughts – and any questions you have – at feedback@jeffclarktrader.com. In Case You Missed It… [Danger Ahead? 800 "Uber Rich" Dump Stocks…]( “The largest, fastest change” we’ve ever seen… Tiger 21, a club of 800 ultra-rich investors, recently started hoarding cash. “We see no easy way out,” warns Bank of America. Jeff Bezos–the world's richest man–recently dumped $4.3 billion in stock. What is going on? The alarm bells are ringing. And what you do NOW will determine your future. Jeff Brown–arguably America’s most accurate investor–reveals [the strange “division”]( happening in the market right now… [Watch This Urgent Briefing Now.]( Get Instant Access Click to read these free reports and automatically sign up for daily research. 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