Welcome back to Thursday, GoldBuzzers!

Well, well, well... what a difference a week makes.

Looks like Congress finally remembered where they left the keys to the government. Only took them 41 days - roughly the same time it takes to sail from London to Hong Kong, which coincidentally is exactly where all the gold action has shifted while Washington was playing shutdown theater.

While Powell & Co. continue their will-they-won't-they December rate cut dance (spoiler: 68% odds, down from 90% because they love keeping us guessing), the real story is unfolding 7,000 miles away in Shanghai. And trust me, what China's doing right now makes Fed policy look about as consequential as rearranging deck chairs on the Titanic.

Today, we’re diving into how China just pulled off the financial equivalent of stealing home plate while everyone was watching the pitcher...

Ok, let’s dive in.

Gold closed just shy of $4,200 per ounce on Wednesday, shrugging off mixed signals as the Senate approved a funding package to end the government shutdown late Monday, with the House passing the measure late on Wednesday evening.

Yes, after 41 days of bureaucratic theater, Washington's longest-ever shutdown is finally coming to an end - though don't expect the traditional data dumps to immediately clarify the economic picture.

The real drama remains at the Fed, where traders currently price in roughly a 68% chance of a 25 basis point rate cut next month, down from 90% just days ago after Powell threw cold water on December cut expectations. Fed Governor Stephen Miran continues beating the dovish drum, advocating for a half-point cut while warning that waiting too long would be "short-sighted."

Meanwhile, gold and silver remain on track for their strongest annual performance since 1979, up a colossal 61% and 82% year-to-date - proving once again that when governments can't even keep their own lights on, investors know exactly where to park their cash.

I have to admit that I don't normally think of what goes on in China as affecting day to day life in the west. I grew up in the UK, spent most of my family holidays in Ireland, now live in Canada and spend time in the US.

But as someone who’s been obsessed with gold and silver for years, I’m starting to believe that what’s happening now in China is potentially the biggest gold story of the decade.

While the media is distracted by Jerome Powell tap dancing around rate cuts, China recently pulled off one of the slickest moves in modern finance - and once again, mainstream media barely paid it any attention.

The Shanghai Shuffle: Not Your Average Policy Tweak

You know how tax changes usually put people to sleep? China tweaked some VAT rules on November 1st - dropped the offset on non-investment gold from 13% to 6% - and boom, the entire gold market shifted on its axis.

What this tax change actually does is funnel gold trading through the Shanghai Gold Exchange. Join the SGE, keep your tax breaks. Stay outside, pay more. Pretty simple carrot-and-stick.

And it's working.

Shanghai just turned into a giant magnet for physical gold. The Shanghai Gold Exchange (SGE) now handles over 75% of global gold trading volume. Let me say that again. Three out of every four gold trades on planet Earth now go through Shanghai.

Meanwhile, western exchanges like COMEX? They're essentially trading IOUs. Less than 10% of their trades result in actual metal changing hands. Meanwhile, Shanghai's running a 70% physical withdrawal rate. Last year alone, 1,400 metric tons walked out the door. That's every single ounce COMEX has in storage. Just... gone.

Silver's "Strategic Asset" Glow-Up

Silver also just became way more interesting. That boring industrial metal everyone ignores? China just classified it as strategic (just like the US), right up there with rare earths and semiconductors.

January 2026, mark your calendar. That's when China starts restricting silver exports. No more shipping to London. No more feeding the LBMA machine. They're keeping every ounce for themselves because, as I’ve discussed in detail recently, you can't build EVs, solar panels, or AI data centers without it.

The October numbers tell us a lot: 387 tons pulled from the SGE, up 87% from September. That's not normal buying. To me, that looks like obvious stockpiling. Prices only go one way when the factory of the world starts stockpiling industrial metals.

The BRICS Gold Rush

While mainstream financial media obsesses over the latest tech earnings, BRICS nations (Brazil, Russia, India, China, and friends) added 20 tons of gold in September alone. Their collective stash? 6,026 tons and counting.

China's doing something even bigger than hoarding metals. They're building a whole new financial plumbing system. Other central banks can now park their gold in Shanghai vaults. They're calling it the "Gold Corridor" - trade routes that run on gold, not dollars. No SWIFT needed. No Treasury approval required.

Check this out: 90% of trade among BRICS nations now settles without touching USD. The dollar had a good run, but that monopoly? It's falling apart like a cheap umbrella in a storm.

What This Means for Your Stack

China now controls 75% of gold trading. They're also hoarding silver. They're building trade systems that bypass the dollar entirely. Half the world's population is already on board.

If you're waiting for this story to show up on CNBC, you're already late. Here, I think, are the three key aspects:

The Bottom Line

This year, Gold has blasted through $4,000 like it wasn't even there, and Silver's done the same at $50. This isn't Fed theater or another inflation panic. A major reason behind the recent strength is because China has changed the rules of the game.

Eric Yeung went viral for a reason when he said that China was systematically rewiring the metals market. They're not even pretending to be subtle. It's happening right now, in real time, while we argue about recession odds.

The supercycle everyone keeps waiting for? Well, it’s already started and China's driving the bus.

That’s a wrap for today, folks. Stay safe and I’ll see you on Sunday with the weekend update.

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Rick Adams
Founder, GoldBuzz
rick@goldbuzz.com