China's slowing economy may weigh on gold demand: report

Stockhouse Editorial
0 Comments| April 16, 2014


The following is an excerpt from Canaccord Genuity’s Morning Coffee newsletter
 
Gold prices fell Tuesday as worries about weaker demand for physical gold in China triggered a selloff across precious metals. The decline erased a week’s worth of gains after data showed China’s money supply growth was lower than expected in March, intensifying investor fears that a slowing economy will weigh on the country’s demand for gold.

China became the world’s top gold consumer in 2013, beating out India for the first time. Demand in the world’s biggest gold consumer is likely to stay flat in 2014, according to estimates from the World Gold Council.

Gold demand in China has expanded every year since 2002, when it declined, according to the industry group, whose forecasts are closely watched in the gold market.

Additionally, traders said the yellow metal’s recent short-covering rally, after the U.S. Federal Reserve’s March meeting minutes last week showed officials were not keen on increasing interest rates straight after unwinding bond purchases, was susceptible to a sell-off.

Spot gold was trading at US$1,302.36 an ounce on Wednesday, down 22 cents. The yellow metal is trading in a 52-week range of US$1,485.15 and US$1,185.29.

Tags: GOLD

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