Gold loses glitter on slowdown fears
LONDON: Gold prices fell on Monday after better-than-expected manufacturing data from China assuaged fears of a slowdown in global growth while deficit-ridden autocatalyst metal palladium soared to an all-time high. Spot gold slipped 0.4 per cent to $1,457.96 per ounce by 1310 GMT. US gold futures fell 0.6 per cent to $1,463.80 per ounce.
Data showing growth in factory activity during November in China, the world’s second-largest economy and biggest gold consumer, pushed up equity markets. “At least in the short-term, this kind of data will keep gold prices in check,” said Julius Baer analyst Carsten Menke. Gold is considered a safe store of value at times of political or economic uncertainty. Demand for the metal was further pressured by the rising dollar, making dollar-denominated bullion more expensive for buyers using other currencies.
On the Us-china trade front, reports said a preliminary agreement has now stalled because of US legislation supporting protesters in Hong Kong and Chinese demands that Washington roll back its tariffs. Gold has risen more than 13 per cent this year mainly due to the trade dispute driving demand for safe assets.
“Nothing particularly has really changed (on the trade front) from last week, the market remains in the dark about how things will progress. Investor appetite for gold is just waning a little bit on lack of direction,” ANZ analyst Daniel Hynes said. Pointing to lingering growth concerns, eurozone manufacturing activity contracted for a 10th straight month in November, IHS Markit’s final manufacturing Purchasing Managers’ Index (PMI) showed. Gold could move up in the medium to longer term as fears of a slowdown still exist, Julius Baer’s Menke added. Investors now await manufacturing data from the US later in the day.