Michael Howell: Gold Is Sniffing Out That China Is Turning On The Money Taps Again

Michael Howell:

“The cycle in gold is all about Chinese devaluation. China is embarking on I think a significant liquidity expansion. It will need its economy to grow. That economic growth will further fuel world economic activity, and it will boost commodity prices globally. And I think that’s the regime we’re in, I think one needs to understand the differences in these cycles.

So what you’re seeing is strong growth in western economies as we know already. That is fueling commodity markets. They’ve had a tremendous run over the last 12 months, but there’s still be still more to go. And now we’re getting a further stimulus likely coming through from China, and I think the increase in the gold price particularly in the last 10 days is indicating the fact that China is turning turning on the money taps again.”

Howell further explains that in 2026, China is setting the gold price, not the West:

“…if you look at the yuan gold price, in other words, the gold price in Chinese yuan (Gold/CNY), it’s bottomed exactly on its trend line at about 元27,000/oz of gold And that’s the thing to look at, not the dollar gold price because China and the Shanghai gold exchange is now the marginal pricer of gold worldwide, eclipsing Comex and London.

And that’s where we need to look. It’s Asian demand that’s fueling gold, not western demand.”

Gold/CNY (Daily)

It’s notable that global central bank gold demand has accelerated in the last few months….

And much of this increased gold demand is coming from China (PBoC):

If the above chart illustrates China’s official gold purchases in 2026, one can only image what the total real purchases add up to.

One more excerpt from the excellent Howell appearance on the Macro Voices podcast:

“The way that I would express it, Eric, is to say that the gold price is going up now because of China’s historic debts, and the liquidity injection that we’ve seen from the PBoC is all about trying to devalue the yuan internally, and that is what’s driving gold up. As we know crypto, one of the other obvious monetary hedges, is illegal in China. So any buying of protection against liquidity expansion or money printing really is gold, and we know that Chinese retail have a huge huge appetite for the gold market. So what I would say is that the course of gold follows what happens from the People’s Bank (PBoC).

So the first thing one needs to look at is what the People’s Bank (PBoC) is doing in terms of its liquidity injections into markets. If they fade off again, and let’s never say never, but if they do fade off again, then the gold market is going to be challenged. If they keep running, which I suspect they probably will, then gold continues to get a bid.”

It’s well worth tuning into Macro Voices to hear Michael Howell explain where we are in the 65-month global liquidity cycle, and which sectors and asset classes are set to outperform.

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