GOLD LOOKS TO CHINA FOR SUPPORT
The Gold price moved lower today due to rumors of the United States Federal Reserve curbing its monetary easing program. As the economy improves, investors look toward higher risk investments and away from lower risk investments such as Gold. However, “Fundamentals for Gold haven't really changed, but other asset classes have now become more attractive, and that's leaving prices largely range-bound,” Tobias Merath, global head of commodity research at Credit Suisse, said.
One of the main players in the global Gold market is China. Last week, the Chinese markets were closed for their annual Lunar New Year holiday. Now that the market is back in session and Gold prices have dipped, there is good reason to believe physical buying will be picking up. Frederic Panizzutti, senior vice president at MKS Finance Geneva, explained, “What can and will probably make a dent in the recent downward direction is the opportunistical buying to take advantage of the sharp recent price decline. All factors that led Gold toward higher levels over the last three years are still intact and we would see no reason why the medium term trend would have changed.” Ole Hansen of Saxo Bank added it may take some time to see the true affect of the physical buying of Gold. “Actual confirmation will more be highlighted when we see monthly data on Hong Kong exports into China,” Hansen said.
At 12 p.m. (EST), the APMEX Precious Metals spot prices were:
- Gold, $1,582.10, Down $23.10.
- Silver, $28.69, Down $0.79.
- Platinum, $1,646.00, Down $51.50.
- Palladium, $736.80, Up $28.40.
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