Don't look now, but the top gold traders in China have just added nearly 17.5 tonnes of notional gold to their books over the last week. Tracking of the top traders in Shanghai points to a massive accumulation of gold, just as signs of buying exhaustion appear in the West. After all, our advanced positioning analytics are pointing to buying exhaustion from both CTA trend followers, with today's session likely to mark the final (albeit marginal) buying program before prices break north of $2100/oz, and discretionary traders, given our gauge suggests they have now fully covered their book short.
Daniel Ghali, TD's Senior Strategist continues: The causal force behind China's behemoth purchases is unclear, but the concurrent strength in CNY may be lending a cue, amid reports that state-owned banks have been active in currency markets this week to help hasten the yuan's recovery against a weakening USD.
While Daniel's handicap is a very likely scenario; here is a seemingly more controversial point of view as to what is going on in China as well as the USA. It is in actuality, simply a normal process tied to supply-demand economics.