Saturday 23 June 2018

Gold tumbles, hits historic two-day loss

New York, April 15, 2013


Gold slumped anew on Monday, racking up its worst two-day loss in 30 years, and investors dumped stocks and other commodities after weaker-than-expected Chinese data raised concerns about the global economic outlook.
Gold took other metals lower with it as its price plunged to a two-year low. Oil fell towards $100 a barrel, while Wall Street opened about half a percent lower.
Spot gold dropped as much as 6.3 percent on Monday alone, hitting a low of $1,384.69 an ounce. In the last two sessions gold has fallen more than 9 percent, making for the worst two days since March 1, 1983. 
Gold was recently at $1,407.40, still down nearly 5 percent. Strategists have cited various reasons for gold's decline, including official selling from central banks and the sharp correction that has caused short-term investors to flee the asset.  
China's recovery unexpectedly stumbled in the first three months of 2013, as it reported its annual growth rate eased to 7.7 percent from 7.9 percent in the final quarter of last year. Economists had forecast 8 percent growth. 
Industrial output in March also undershot expectations and added to investor sensitivity after recent disappointing economic data out of the United States. A regional manufacturing report on Monday showed the pace of growth slowed, the latest data to suggest the economy lost some steam heading into the second quarter.
"The growth numbers out of China are absolutely crucial for commodities and the numbers that came out are significantly worse than people were expecting," said Nic Brown, head of commodities research at Natixis in London.
"China makes up 40 percent of demand for base metals and all the growth in demand for oil is coming from the developing world, so to see weakness in China is bad for commodities generally."
Last week Cyprus revealed it would sell around 400 million euros worth of gold to help plug its finances and the move has sparked suggestions that larger countries in the region could use the move to cash in on some huge jumps gold has seen over the last decade. 
Brent crude futures dropped more than $2 to $100.85 as the disappointment stirred the already-festering global recovery concerns. U.S. crude also lost more than $2 to $89.14.
US stocks also fell for the second straight session, weighed by the disappointing data both domestically and abroad. "None of the economic data has been very good for the last couple of weeks. When you look at the whole scope of data, it looks like we have been going into a slowdown here," said Paul Mendelsohn, chief investment strategist at Windham Financial Services in Charlotte, Vermont. 
"I wouldn't say this is over yet, but there are enough indicators out there to really indicate that investors should approach this market with a degree of caution which doesn't seem to exist right now."
The Dow Jones industrial average dropped 81.06 points, or 0.55 percent, to 14,784.00. The Standard & Poor's 500 Index lost 10.65 points, or 0.67 percent, to 1,578.20. The Nasdaq Composite Index fell 21.31 points, or 0.65 percent, to 3,273.63.  - Reuters

Tags: China | Oil | Gold | data |


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