Gold Leaps as Investors Seek Safe Haven Amid Chinese Stocks Crash
Precious metals jumped higher in early morning European and Asian trading as investors sought a safe haven following a sharp decline in Chinese stocks.
Gold rose by 1.14% to trade at $1234.30 at time of writing, whilst Silver jumped 0.93% to trade at $14.825 per ounce.
The rally in commodities was sparked by the Chinese Shanghai Composite Index plummeting more than 4%, falling to a fresh 5-year low. The sharp decline came after China’s central bank guided the yuan to its weakest level in three weeks. This sent investors fleeing Chinese assets and raised questions over the economic health of the entire Asian region.
However, it wasn’t’ all positive for the metals market this morning. As the precious metals all posted strong advances, Copper saw a heavy loss, dropping 0.99% at time of writing, trading at $2.104. China is the largest consumer of the industrial metal, accounting for 40% of total global consumption of Copper. The devaluation of the Yuan, coupled with slowing growth in the world’s second largest economy, means the future copper consumption will be affected, sending the industrial metals lower.
The rise in popularity in precious metals, following 2 years of declines, comes after a rocky start to the equities market and a widespread degree of uncertainty regarding the economic health of the US, EU and Asian nations.
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