Gold Shines On Speculation China Will Push For Easing
Analysis | Commodity Market Commentaries | Written by ICN.com | Fri Jul 13 12 05:12 ET
Gold recapped yesterday's loss in the European session on Friday, but the metal is still set to post the second weekly decline on the back of a firmer U.S. dollar, which was supported by fading expectations that Federal Reserve will step up easing to bolster U.S. growth.
As of 11:03 (GMT+3), Spot gold was up 0.87 percent at $1,577.02 an ounce, compared with the day's opening of $1570.86, recording the an intraday high of $1577.69 and session low of $1565.86.
GDP figures from the world's second largest economy turned out to be the lucky numbers for the yellow shiny metal, giving it back a punch of flavor despite the ongoing pressures from the Fed's uncertain policy actions and Europe's debt crisis, boosting the dollar instead.
China’s growth slowed for the sixth quarter as trade and manufacturing pulled the brakes, adding pressures on the central bank to boost stimulus further in order to support growth in the second half of the year, after the bank cut the interest rates in particular.
The gross domestic product for the second quarter slowed to 7.6 percent, a three year low compared with 8.1 percent expansion during the first quarter, while analysts’ expectations were of 7.7 percent.
The outlook from the U.S. interest rates have quite tempered investor appetite for the yellow shiny metal and especially with emerging evidence of economic slowdown even in other large economies from China and 17-nation euro countries.
Despite morning gains, which remains apparently subdued, the yellow metal is struggling to retain its "safe haven" appeal, boosted in one hand by bullish bets of monetary easing from China, but hurt by strengthening U.S. currency on the other.
Moving to other precious metals, spot silver was up 1.01 percent at $27.38 an ounce. Spot platinum rose 0.76 percent to $1,425.59 an ounce. Spot palladium gained 1.22 percent to $581.75 an ounce.
Overall, global outlook marred by uncertainty amid growing signs the recovery is running out of steam will likely warrant the option of additional monetary stimulus in likely short manner and that should keep bullions as a good investment and in other words a safe haven.