Daily Gold & Silver Market Report–1/7/2016

Marcey Hollon

1/7/2016 1:00:00 PM

GOLD HITS NINE-WEEK HIGH ON CHINA WORRIES; WALL STREET SHAKEN ON CHINA, OIL

Concerns over the Chinese economy helped Gold break $1,100 per ounce to reach a nine-week high. Investors scrambled money into safer assets as stocks took a hit after the Chinese yuan fell 7 percent. Gold is viewed as a safe haven and often looked to when global stocks appear unstable. "Gold's strength is probably going to be relatively short term, but there is an upside risk to Gold, if the view that China is going to pull the whole world into recession becomes stronger," Citigroup metals strategist David Wilson said. "But if the U.S. and Europe continue to grow, Gold will go weaker ... Chinese stock markets had got massively overinflated because a lot of money piled into it and now people come back to reality." While China’s economy begins to slow, the country added more Gold to its reserves in December bringing the total in the second half of the year to over 100 tonnes.

A continued slide in crude prices and massive volatility in China has shaken Wall Street and has stocks much lower on Thursday’s opening. As the yuan had its largest fall since early fall, Shanghai stocks were halted from trading in the massive selloff. Oil fell to 12-year lows on weaker demand from China. In an economic forum in Sri Lanka, billionaire investor George Soros pointed to the financial crash of 2008 and the present economy and thinks global markets are headed for a crisis. "The moves we have seen in the past few days feel very similar to the ones we saw in August," Scott Brown, chief economist at Raymond James in St. Petersburg, Florida, said. "While investors are concerned about the slowdown in the Chinese economy, the question now is whether the authorities have the ability to prop up the market." The Dow lost 1,000 points in August in one trading day based on similar factors of falling oil prices and the weakened yuan.

 

At 2:01 P.M. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,110.90 Up $16.00
• Silver, $14.40 Up $0.34
• Platinum, $874.30 Down $0.70
• Palladium, $489.80 Down $16.30

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