2012-04-14

Gold price declined after disappointing report on Chinese GDP and a stronger U.S. dollar

The gold price declined $10.04, or 0.6%, to $1,665.85 per ounce Friday morning amid a disappointing report on Chinese GDP and a stronger U.S. dollar.  The spot price of gold held in a narrow range between roughly $1,670 and $1,680 in overnight trading, but turned modestly lower as the U.S. Dollar Index rose 0.7% to 79.798 against a basket of foreign currencies.

China’s first quarter GDP report was the primary catalyst for the markets’ weakness, however.  At 8.1%, the Chinese economy grew at a slower pace than the 8.3% rate economists were expecting, and marked the lowest growth rate in 11 quarters.  The disappointing report led to broad-based selling in stocks and commodities, following two straight days of gains.

As for the price of gold, Standard Bank analyst Walter de Wet wrote in a note to clients that “Especially in the United States, the investment climate is very neutral towards gold at this stage. People really need to see a policy catalyst before they come back aggressively.”

“On the physical side, from the end of this month there is really no seasonal demand coming until August,” de Wet asserted. “It is going to be difficult to break much higher if we don’t have this physical buying supporting any investment demand coming through for the next two or three months.

Credit Suisse analyst Tom Kendall offered a similar, albeit somewhat more constructive outlook on the gold price in a recent commentary.  “It’s a market that is more or less being pinned in dollar terms to the $1,650 level for a while,” he contended.  “The next move, I suspect, is going to be higher, but the market is fairly susceptible to headlines at the moment.”

“Volumes are very thin, by and large,” Kendall added, “and the key really from here is for something to give gold a push up through $1,675/1,680 and above there, you would start to see some more activity.”

0 comments:

Related Posts Plugin for WordPress, Blogger...

KLSE Info Zone

About This Blog

Malaysia Gold Investment

I found Gold Investment in Malaysia is a vary good tools to make profit when the market is down. I also found that Gold Price go up and down more slower compare to share market so to make money in long term, Gold is the right tools. This blog is all about Malaysia Gold Info and the way to make profi

Blog Malaysia

BlogMalaysia.com

  © Free Blogger Templates 'Greenery' by Ourblogtemplates.com 2008

Back to TOP