Gold Slumps to 1-Week Low as Investor Confidence Recovers
Wednesday saw the price of Gold dip to its lowest price in a week as market confidence rose following higher than expected figures from the Chinese trade market, alleviating concerns over the stability of Asia’s biggest economy.
While Chinese exports decreased by 1.4% compared to the same period in December last year, the numbers are still far better than the projected decline of 8.0%. Likewise, imports dropped only 7.6%, which is 3.9% lower than expected. The better than expected performance allowed China to have a surplus of $60.1 billion in December, up $6 billion just a month before.
China also saw its exports inch up by 2.4% in December, after experiencing a 3.7% decline in November. Imports, meanwhile, declined by 4.0% last month following a 5.6% drop the month before.
As global equity markets recovered on Tuesday, prices for metals declined by 1%, or $11.
Gold for next month’s delivery on the Comex division of the New York Mercantile Exchange dropped by 0.4%, or $4.30, trading at $1,080.90 a troy ounce by 09:45 GMT. It rose slightly from its lowest price of $1,079.60 since the 6th of January.
Moving on to silver’s March delivery, the metal climbed 0.47%, or 6.4 cents, trading at $13.81 a troy ounce in London’s early hours.
Meanwhile, copper futures finally broke away from its 6-½ year low on Wednesday thanks to strong demand in the Chinese market. Dubbed as the world’s factory, demand for copper in the country remains very high with a 15.2% increase in copper arrivals in December compared to the previous month.
Prices for copper will remain lower than expected this year, however, as China’s volatile stock market and depreciating yuan still remain a concern for some investors, dampening overall sentiment.
China, however, continues to see a high demand for copper as it pumps out electronics for the world’s biggest brands, giving the Asian nation the distinction of being the world’s largest consumer of copper, accounting for close to half of the world’s consumption.
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