Gold Lower After China Stimulus News

Gold edged lower on Tuesday as the dollar and equity markets rose after data showing China’s weakest economic growth in years fanned stimulus hopes and spurred investors towards riskier assets.

Data showed that the world’s second-biggest economy grew 6.8 percent in the fourth quarter, the slowest rate since 2009. For 2015 as a whole China’s growth came in at 6.9 percent, the weakest in 25 years.

Spot gold was down 0.1 percent at $1,087.20 an ounce by 1059 GMT after a lethargic session on Monday when U.S. markets shut for the Martin Luther King holiday. U.S. gold for February delivery was down 0.3 percent at $1,087.20 an ounce.

Bullion scaled a two-month high of $1,112 on Jan. 8 as investor appetite for risk decreased on renewed concerns about global growth, especially a slowdown in China and whether authorities in Beijing can manage it.

“As long as there is confusion about how China manages exchange rate policy, how they will intervene in the stock market and so on, there will be some safe-haven demand for gold,” Danske Bank senior analyst Jens Pedersen said.

via Reuters

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, he established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza