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NewsGold climbs to 2-week high on Chinese demand, softening equities
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Gold climbs to 2-week high on Chinese demand, softening equities
by Cals Sat 04 Jan 2014, 01:49
Published: Friday January 3, 2014 MYT 1:09:00 PM
Updated: Friday January 3, 2014 MYT 1:16:04 PM
Gold climbs to 2-week high on Chinese demand, softening equities
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Gold is headed for its best weekly performance since October, supported by strong demand from China and weaker equities - EPA Photo.
GOLD rose for a fourth session on Friday, hitting a two-week high as weaker equities spurred demand for the metal as a safe-haven asset.
Gold, headed for its best weekly performance since October, was also supported by strong demand from China, the world's biggest bullion consumer.
The gains come after gold lost nearly 30% in 2013, ending a 12-year bull run and posting its largest annual loss in 32 years, largely due to the U.S. Federal Reserve's plans to unwind its monetary stimulus programme.
Analysts, however, cautioned that the upward momentum in the early days of the new year will not last and the metal is likely to record another drop in value in 2014.
"The gains might be persistent in January as we come off 2013 losses but it won't continue for the remainder of the year as the (Fed) tapering is set to begin and the global economy is improving," said Chen Min, an analyst at Jinrui Futures in Shenzhen.
The bond-buying stimulus measures amid a weak global economy helped boost gold prices over the last few years. But with a brightening labour market and other economic progress, the Fed decided to scale back the stimulus, hurting gold's appeal.
Spot gold was up 0.6% to US$1,231.60 an ounce by 0332 GMT after hitting US$1,235.54 earlier – its highest since Dec 18.
It climbed 1.6% on Thursday.
Silver was also trading near its highest in two weeks after gaining 3.5% in the previous session.
Asian share markets were under water on Friday, caught up in an outbreak of global risk aversion.
"Positive bullion prices in reaction to the decline in equities may set the tone for 2014 and reinforce the negative correlation between the two," HSBC analysts said in a note.
CHINA DEMAND
Premiums on the Shanghai Gold Exchange showed that Chinese buying has picked up in recent days as global prices hovered around US$1,200 towards the end of 2013.
The buying pace dropped slightly after Thursday's rally.
Premiums to London prices for 99.99% purity gold dropped to about US$15 an ounce after climbing to US$25 earlier this week.
Chinese demand is likely to stay strong in the build up to the Lunar New Year on Jan 31, when gold is traditionally given as a gift, Jinrui's Chen said – Reuters.
Updated: Friday January 3, 2014 MYT 1:16:04 PM
Gold climbs to 2-week high on Chinese demand, softening equities
[You must be registered and logged in to see this image.]
Gold is headed for its best weekly performance since October, supported by strong demand from China and weaker equities - EPA Photo.
GOLD rose for a fourth session on Friday, hitting a two-week high as weaker equities spurred demand for the metal as a safe-haven asset.
Gold, headed for its best weekly performance since October, was also supported by strong demand from China, the world's biggest bullion consumer.
The gains come after gold lost nearly 30% in 2013, ending a 12-year bull run and posting its largest annual loss in 32 years, largely due to the U.S. Federal Reserve's plans to unwind its monetary stimulus programme.
Analysts, however, cautioned that the upward momentum in the early days of the new year will not last and the metal is likely to record another drop in value in 2014.
"The gains might be persistent in January as we come off 2013 losses but it won't continue for the remainder of the year as the (Fed) tapering is set to begin and the global economy is improving," said Chen Min, an analyst at Jinrui Futures in Shenzhen.
The bond-buying stimulus measures amid a weak global economy helped boost gold prices over the last few years. But with a brightening labour market and other economic progress, the Fed decided to scale back the stimulus, hurting gold's appeal.
Spot gold was up 0.6% to US$1,231.60 an ounce by 0332 GMT after hitting US$1,235.54 earlier – its highest since Dec 18.
It climbed 1.6% on Thursday.
Silver was also trading near its highest in two weeks after gaining 3.5% in the previous session.
Asian share markets were under water on Friday, caught up in an outbreak of global risk aversion.
"Positive bullion prices in reaction to the decline in equities may set the tone for 2014 and reinforce the negative correlation between the two," HSBC analysts said in a note.
CHINA DEMAND
Premiums on the Shanghai Gold Exchange showed that Chinese buying has picked up in recent days as global prices hovered around US$1,200 towards the end of 2013.
The buying pace dropped slightly after Thursday's rally.
Premiums to London prices for 99.99% purity gold dropped to about US$15 an ounce after climbing to US$25 earlier this week.
Chinese demand is likely to stay strong in the build up to the Lunar New Year on Jan 31, when gold is traditionally given as a gift, Jinrui's Chen said – Reuters.
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Re: Gold climbs to 2-week high on Chinese demand, softening equities
by Cals Sat 04 Jan 2014, 01:54
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Cals- Administrator
- Posts : 25277 Credits : 57721 Reputation : 1766
Join date : 2011-09-08
Location : global
Comments : “My plan of trading was sound enough and won oftener that it lost. If I had stuck to it Iâ€d have been right perhaps as often as seven out of ten times.â€
Stock Exposure : Technical Analysis / Fundamental Analysis / Mental Analysis
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