While the cloud of a slowing Chinese economy has been hanging over the global markets for some time, it’s gotten a whole lot heavier this week! 3 months ago, poor macro data coming out of the world’s second largest economy would have been welcomed by the stock markets as a sure sign of coming economic stimulus. What has happened of late, though, has been different – not bad, just different. Now, the markets aren’t sure how to take Chinese data at all – regarding the good with healthy scepticism and the bad with wholehearted  conviction. The result? A massive sell-off in equities as the pace of Chinese and therefore global growth are called into question. Oh, and I almost forgot to mention Greece. Tsipras has resigned, we’re due snap elections, what next? This week is risk-off week.

I’m all too aware of the ease by which one can get hung up on the negatives but it really does pay off to look at things from the opposite side of the argument from time to time. That said, get a load of this. In addition to some sterling short term trading conditions off the back of this week’s volatility, we’ve also seen an old friend in Gold stage somewhat of a resurrection. Not only have we had ongoing currency devaluations in Asia-Pacific boosting demand for the yellow metal as an alternative currency, one free of annoying interventions from a meddling government, but Gold has also come out fighting for the safe-haven corner too as markets digest low interest rates for some time yet with a US Federal Reserve appearing too scared (after some analysis of its rhetoric) to make that first move.

Precious metals miners have had a good week off the back of this, with Kaz Minerals (KAZ) shares in particular benefitting handsomely from both of the aforementioned Gold drivers.

But will the Fed indeed just keep on pushing back US rate lift-off, citing emerging markets turmoil and wayward inflation figures? Or will it hike anyway, perceiving the threat of prolonged cheap money leading to an irresponsible borrowing bubble (just one of many so-called ‘market distortions’ that have been mentioned recently) as much greater than the risk of a market shock when higher interest rates hit home? The one thing we can be certain of is that things are pretty uncertain right now, and that’s ok. Uncertainty breeds volatility breeds opportunity.

Did someone say Bear market? Let me tell you this: Where there’s a Bear market somewhere, there’s always a Bull market somewhere else.

Augustin Eden, Analyst