On Wednesday the gold price was just above two-week lows, with the greenback firming and the Chinese economy slowing more than expected.
Spot gold was last at $1,189.20/1,190.00 per ounce, down $2.70 on Tuesday’s close – it struck its lowest in two weeks at $1,184.00 in yesterday’s session. The dollar has gained this morning, reaching 1.0578 against the euro, just short of its highest in nearly a month.
“Precious metals continue their aimless meandering as the dollar remains the focus. A sell off in the greenback yesterday lifted prices temporarily, but dollar buying has resumed and precious metals are once again back in the doldrums,” Marex Spectron’s David Govett said.
Chinese data also negatively influenced the market sentiment. The country’s quarterly GDP growth figure was the lowest figure in six years and should prompt further
stimulus measures from the PBoC, though it was in line with the forecasts.
At the same time, a number of other economic indicators were lower than markets hoped – year-on-year industrial production was at 5.6 percent, much lower than the projected 6.9 percent and also the lowest in six years.
Fixed asset investment was at 13.5 percent, lower than the forecast 13.8 percent, and retail sales at 10.2 percent were 0.7 percentage points lower than expected.
“It is now even more likely the PBoC will need to further cut interest rates to support the economy, but with credit levels very high in the economy, there will be limitations as to how much monetary policy can support the economy,” MKS said in a note.
“Market participants clearly believe that the Chinese figures mean lower economic growth and thus more subdued physical demand for gold.” Commerzbank noted.
Silver was three cents lower at $16.10/16.14 per ounce – it hit a near-four-week low in the previous session.
The platinum group metals have yet to react significantly to plans by Eskom, which provides 95 percent of South Africa’s electricity, to step up its rolling blackouts.
Still, platinum was just $1 higher at $1,147/1,152 per ounce while palladium was unchanged at $760/765.
