Gold modestly lower on profit taking
London (Mar 13) Gold prices are modestly lower in early trading Thursday, after notching another six-month high overnight. Some mild profit taking and also chart consolidation from recent price gains are featured. Spot gold was last down $4.37 at $1,368.32. Spot silver was down 7 cents at $21.31.
In overnight developments, there was another downbeat economic report coming out of China Thursday. China’s industrial output rose by 8.6%, year-on-year, in the January and February period. That’s lower than the 9.5% rise that was expected and down from a rise of 9.7% in December. While the above numbers are considered by the market place to be a “miss,” most other industrialized nations would love to have economic readings like that. What the market place is noticing is that the rate of economic growth in China is gradually easing. Traders and investors are also a bit concerned about China’s credit and financial system, given the recent bond default by a Chinese corporation—the first one ever. Gold has seen safe-haven buying due to the uncertainty of the aforementioned matters in China.
The U.S. dollar index fell to a 4.5-month low overnight, which also is an underlying bullish factor for the precious metals.
The Russian troop occupation of Ukraine is still a concern among traders and investors. U.S. and European Union leaders are threatening to impose economic and diplomatic sanctions on Russia. Meantime, Russia said it will do the same to the U.S. and EU. A referendum from Crimean citizens on secession is scheduled for Sunday, and that could be the next flashpoint in the region. It would not be surprising to see keener risk-aversion in the market place on Friday, heading into an uncertain weekend for Ukraine. The Russian occupation of Crimea has also been a bullish factor for the gold market.
U.S. economic data due for release Thursday includes the weekly jobless claims report, import and export price indexes, manufacturing and trade inventories, and retail sales.
Source: Kitco
