SINGAPORE, Oct 13 — Gold fell from the highest in seven weeks as Chinese trade data underscored the headwinds for global growth and investors weighed the probable timing of the first US interest rate increase since 2006.
Bullion for immediate delivery lost as much as 0.9 per cent to US$1,153.05 (RM4,816.81) an ounce and was at US$1,154.80 at 1:03pm in Singapore, according to Bloomberg generic pricing.
Prices rose for a second day yesterday, gaining to US$1,169.09, the highest since August 24.
China’s imports slumped for an 11th month, extending the longest losing streak in six years, reflecting this year’s plunge in commodity prices and tepid domestic demand as China shifts from low-end manufacturing and debt-fueled investment. China vies with India as the top consumer of bullion.
The “trade data showed that internal demand in China is slowing more drastically than what most had thought,” Howie Lee, an analyst at Phillip Futures Pte in Singapore, said by phone.
“Given that gold is one of the favorite investment choices for the Chinese, that translates into lesser investment demand for gold.”
Bullion investors are tracking comments from US central bankers to figure out when the Fed will start tightening.
Atlanta Fed chief Dennis Lockhart argued yesterday the improving economy justified a move in 2015.
Fed Governor Lael Brainard cautioned against raising rates prematurely and Chicago Fed President Charles Evans favored a delay to mid-2016.
“Anything that the Fed says that could shed some light on what they’re going to do with regards to interest rates and how it subsequently affects the dollar will be watched closely,” David Lennox, an analyst at Fat Prophets in Sydney, said by phone.
“We’re not expecting any action though, more rhetoric.”
The chances of a rate liftoff in December are below 40 per cent, with odds rising to 62 per cent for a move in March, futures data show.
Bullion of 99.99 per cent purity fell 0.7 per cent to 235.65 yuan a gram on the Shanghai Gold Exchange.
Silver, platinum and palladium retreated, with platinum tumbling 1.4 per cent. — Bloomberg
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