Gold climbs to $1,312.20 an ounce after third day of gains
NEW YORK (Aug 10) Gold continues to benefit from heated speculation of an imminent surge in Chinese demand with the Comex recording its third consecutive session of gains Friday.
The yellow metal retained the gains it made Thursday with most actively-traded contract, gold for December delivery, going as high as $1,316.50 per ounce in intraday trading -- higher than the session high of $1,313.80 reached the day before -- from a prior settle of $1,309.90 per ounce. The yellow metal eventually closed the session at $1,312.20, for a gain of $2.30 over the course of the day's trading.
Bullion’s revival of fortunes owes much to data indicating improved industrial output from the Asian giant for the month of July, with factory production up 9.7 per cent year-on-year according to the National Bureau of Statistics. The measure provides encouraging indications of China’s trajectory, and thus the purchasing power of the Chinese retail gold buyer.
The new figures come the day after data revealing growth of both imports and exports for China at greater rates than anticipated, taken as a sign the economic superpower may be emerging from the slowdown of the first half of the year.
Upbeat Chinese data is always balm to a troubled metal, as the country is the world’s number 2 consumer of retail gold, and the only customer before it – India – has severely restricted access via the recent provision of laws designed to curb gold’s consumption.
Another factor sure to have underpinned the day’s trajectory would have to be the news from South African miners that gold production fell over 14 per cent in the month of June, attributable to labour strife. Mining production figures for the month were down 6.2 per cent year-on-year, with gold contributing -2.3 per cent to the diminished figures. The new figures are a reflection of a series of incidents clustered around labour relations that have observers speaking darkly of a possible end to gold production in the country altogether.
Meanwhile, domestically, the question dominating investors’ thinking concerns the timing of tapering – that end to the Federal Reserve’s campaign of monetary easing that is anticipated to come sometime this year. A series of comments from various high-ranking Fed policy-makers has investors thinking the end to easy money could be just around the corner, and with that prospect comes a diminution of the usefulness of gold, ever the hedge in inflationary times.
