Gold price goes cold as Chinese stop buying over New Year

Taipei-Taiwan (Jan 29) Gold futures posted the longest streak of losses since November last year as buying from China stopped ahead of its week-long holiday to celebrate the Lunar New Year.

Prices dropped on Friday for the fourth straight day, cutting the year’s gains. China, the biggest consumer of gold, increased gold purchases in the run-up to the start of the Year of the Rooster this week, when bars or jewelry made from the metal are traditionally given as gifts.

“The Chinese holiday can exaggerate some of the moves,” Bob Haberkorn, a senior market strategist at RJO Futures in Chicago, said in a telephone interview. “We’re going to get lighter volume coming in. A lot of the focus is moving into risk assets.”

Gold futures for April delivery fell 0.1 percent to settle at US$1,191.10 at 1:42pm on the Comex in New York. Futures earlier fell as much as 0.8 percent, touching the lowest since Jan. 11. The four-day losing streak is the longest since Nov. 14.

After touching a two-month high earlier this week, gold’s rally has withered as surging stock markets fueled investor appetite for risk. The Dow Jones Industrial Average climbed above 20,000 for the first time this week and the MSCI All-Country World Index is near a record.

The metal pared earlier losses on Friday after a report showed US economic growth slowed more than forecast last quarter on the biggest drag from trade in six years and more moderate consumer spending. Business investment picked up, which may be a harbinger for faster expansion this year.

“We expect full-year Chinese demand to still fall short of levels seen in 2015,” Citigroup Inc metals analyst Nell Agate said by e-mail from London. “It’s possible that Chinese jewelry sales are likely to slow as the Chinese break for new year festivities.”
 
In other precious metals:

Silver futures for March delivery rose 1.7 percent to US$17.136 an ounce.

Platinum futures for April delivery climbed 0.2 percent to US$983.30 an ounce.

Palladium futures for March delivery rose 2 percent to US$738.60 an ounce. The metal is down 6.3 percent this week, the biggest weekly drop since October last year.

Source: TaipeiTimes