Chapter 634: The Surge in Gold is a Trend
"Suppressing the gold price while ignoring the RMB, they must think highly of me."
Although he said it lightly, Lu Liang's expression was far from relaxed. The red and green lights reflected on his face, forming a frown between his brows.
In his view, and that of the market consensus, shorting the RMB should take precedence over going long on gold.
After all, gold is just a circulating currency, high in value but lacking deep political significance.
In contrast, the RMB represents East Country's credibility and the wealth of its 1.4 billion citizens.
Once the US tariff policy was implemented,
the RMB fell dramatically, which sounded so pleasing to the ears.
This is the most direct manifestation of US dollar hegemony.
The underlying logic for the surge in London gold is also US tariffs, East Country's countermeasures, and the unstable international situation, thus making shorting the RMB a far greater priority than going long on London gold.
What Lu Liang didn't expect was for the Wall Street institutions to actually elevate the priority of London gold above that of the RMB.
"Lure them into a trap? Besiege reinforcements?"
In an instant, Lu Liang thought of two possibilities.
One possibility is that they truly want to make London gold the main battlefield, giving the Foreign Exchange Administration of East Country no reason to intervene.
Currency is a reflection of national credibility. If the moment the US imposes sanctions, the RMB starts to continuously fall, how would that look in the international community?
It can fall, but it must do so rationally.
After all, the US imposing tariffs on some goods does have an impact on some domestic foreign trade companies.
If at that moment, Tianxing faces difficulties, and turns to the state for support while offering conditions, the state can fully enter the market under the guise of stabilizing the exchange rate and provide assistance.
However, having the main battlefield in London gold would solve this problem from the root, leaving Tianxing isolated.
The other possibility is to feign an attack on London gold, while actually planning something big in the foreign exchange market.
However, this possibility seems low, as the Foreign Exchange Administration of East Country is not incompetent. Brought to you by the folks at MV|LEMPYR.
This wave will peak at 6.9,
there's absolutely no chance of breaking 7 in the short term.
"Mr. Lu, do we follow or not?"
Sun Yutao looked at Lu Liang, recognizing this as an attempt to lure them into a trap.
By sacrificing part of their own interests, suppressing the gold price, they intend to lure their main funds into London gold.
If it were him, he would certainly choose not to follow. As the company grows larger, stability should be prioritized before considering profits.
Like in League of Legends, only by staying alive can one contribute damage.
If one dies for the sake of a couple of kills, missing the most crucial time for development, it's easy to end up with nothing.
But he is him, and Lu Liang is Lu Liang.
Lu Liang said, "Quickly follow up, while reducing the forex investment by 50%."
He squinted his eyes and sneered, "The surge in gold is a trend. Do they really think they can cover the sky with one hand and short against the trend?"
Previously, based on the data, Lu Liang had conducted an assessment.
Even with the funds from Neon and some quantum as their secret weapon, the chance of them profiting and successfully withdrawing was actually less than 40%.
Because this time both BlackRock and Vanguard are involved, Tianxing is almost single-handedly going up against the entirety of Wall Street.
But now, they are not satisfied with just sniper funds, they want to devour him completely, which also gives Lu Liang an opportunity to counterattack against the odds.
With an order given, a large amount of funds entered the London gold market, and the gold price started to rise slowly.
Meanwhile, in the trading rooms of Wall Street institutions.
"The trading volume in the London gold market is surging; it must be stars injecting more funds."
A number of fund managers looked excited; they belong to one of the strongest institutions in the capital market, and theoretically, a challenger's mentality would not appear on them.
But at this moment, they are like fledgling newcomers, clenching their fists, their eyes filled with a thirst for victory.
It's only because they rely on their numbers and financial strength; if their roles were reversed, they wouldn't even dare to have the thought of challenging.
Because they're facing Lu Liang, undefeated in three years, who built a formidable reputation with invincible momentum.
Fortunately, this market only looks at results, never caring if it's bullying with strength, many against few.
As long as they win, it will add a splash of color to their resumes.
Everyone wanted to step over Lu Liang to become a star fund manager on Wall Street.
Several institutions took action one after another, shorting London gold against the trend.
They know that going against the trend is not advisable, and the gold surge is likely a trend in the coming years.
But it doesn't prevent them from using this to snipe Lu Liang.
First, jointly burst his position, then elevate, only then can they maximize their profits.
Tianxing spent 523 million dollars to aggressively push the price of London gold to 1720 dollars.
But as the major institutions entered the market, the K-line had no time to show and reverted to 1702 dollars.
1700 dollars is also in a precarious state.
"Keep the amount of funds unchanged, but split it into more small transactions to create the illusion of a stream of buy orders."
In the Tianxing Trading Room, Lu Liang looked up at the big screen. The funds on the short side seemed endless; whatever they bought, the other side sold.
"Set the limit for funds invested in London gold tonight temporarily at 5 billion dollars, even if it falls below 1700, it doesn't matter."
Lu Liang paused and instructed again, it was just after midnight, still the 6th, with the US still on the noon of the 5th.
The real day of reckoning had not yet arrived; over these two days, they planned to invest no more than 15 billion dollars.
Most funds should be held in reserve, to be decisive at critical moments.
Lu Liang pondered, suddenly looking at the foreign exchange market.
Offshore RMB, by half past midnight, had dropped by 530 basis points, current price 6.8830, just 170 points shy of falling below 6.9000.
He watched for a long, long time,
Liang Wenhu also kept his eyes on him.
He's responsible for the quantitative trading part; as long as the market remains stable without sudden changes, he's mostly without tasks, idly observing Lu Liang's methods and thoughts.
Lu Liang's mouth curved into a smile, suddenly he shouted, "Allocate another 5 billion dollars for shorting the RMB, tonight we must push the exchange rate to 6.89."
Sun Yutao was momentarily stunned, slightly unable to follow Lu Liang's thought process, but years of muscle memory allowed him to distribute Lu Liang's tasks immediately.
Liang Wenhu frowned tightly and suddenly said, "Lu, won't this be too risky?"
Lu Liang's eyes showed a hint of surprise, "You know what I intend to do?"
"I have some guesses, but not fully certain."
"Tell me."
Liang Wenhu pondered for a moment then said, "In the coming years, international turmoil will be the trend, and the rise of gold prices is in line with that."
"The institutions opposing us know this, but they're confident that the public hasn't realized it yet, so they dare to short gold now."
"And your intention in shorting the RMB is to inform the public that the turbulent period has arrived, indirectly telling them that gold will surge."
Lu Liang, filled with admiration, asked again, "Then what do you think I'll do next?"
"Tonight first push the offshore RMB to 6.89, and tomorrow night build on that to 6.9, and finally start creating momentum."
Liang Wenhu looked at Lu Liang with eyes full of respect; after all, Lu Liang is also a co-founder of Douyin.
If the RMB exchange rate falls below 6.9, he would undoubtedly have Douyin broadcast it widely, making everyone aware.
When the national currency depreciates, institutions can still hold US dollars or seek investment channels for hedging.
But ordinary people have only one option, which is to buy physical gold.
Throughout history worldwide, many dynasties changed, many currencies replaced, but gold remained gold.
In terms of ornamental or industrial value, it's considered a supermodel, not part of the six realms, nor the five elements.
Two years ago, the Chinese aunties' gold-buying frenzy and their triumph against Wall Street short-sellers are still fresh in memory.
What Lu Liang is doing now is guiding the market to recreate the events of two years ago.
As domestic gold prices rise, and international markets do too, Lu Liang will not only crush the shorts but also choose any exit strategy, becoming the biggest winner in this battle.
When this plan succeeds, it will be remembered as yet another classic battle in financial history, a must-study case for every finance student.
Because the intricacies are worth analyzing, juggling powers from the market, institutions, and the populace in the palm of his hand.
"Wenhui, you truly have talent," Lu Liang couldn't help but praise, himself a bit embarrassed by the compliment from Liang Wenhui.
He had participated in the event two years ago when the Water Shell gold-buying frenzy happened, and the Chinese aunties gave a beatdown to the Wall Street short sellers.
Shimmering gold, no one can resist its allure.