x
Breaking News
0

Gold Eases In Asia After China Consumer Prices Come In A tad Weaker Than Seen

CommoditiesJan 09, 2018 09:30PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Gold dips in Asia

Investing.com - Gold prices fell in Asia on Wednesday as weaker than expected consumer inflation in China last month gave some pause to views on global inflation rising more than expected in 2018.

Gold futures for February delivery on the Comex division of the New York Mercantile Exchange fell 0.12% to $1,312.10 a troy ounce.

Consumer prices rose 0.3% in China on month and at a 1.8% on year, official data showed Wednesday, below the expected 0.4% and 1.9% gains seen respectively.

Overnight, gold prices continued to ease from multi-month highs amid a revival in the dollar as investors weighed the prospect of global monetary policy tightening after the Bank of Japan trimmed its bond purchases.

Gold prices retreated further from four-month highs on Tuesday as treasury yields surged, supporting dollar strength amid growing expectations for global monetary policy tightening after the Bank of Japan’s cut its purchases of long-term bonds.

In a rising interest rate environment, investor appetite for gold weakens as the opportunity cost of holding the precious metal increases relative to other interest-bearing assets such as bonds.

Also supporting the dollar strength was a drop in safe-haven demand as global equity markets continued to top multi-year highs amid ongoing risk-on sentiment.

Some market participants suggested that gold could retreat further toward its 100-day moving average around $1,290. Recent data, however, pointed to ongoing support for gold as hedge funds and speculators increased their bullish bets on the precious metal.

The net long position in Comex gold futures and options - the difference between bets on rising and falling prices – rose nearly 40% to 152,650 contracts, the Commodity Futures Trading Commission (CFTC) reported Friday.

Despite the prospect of global monetary tightening from the Federal Reserve, Bank of England and Bank of Canada this year, BofA Merrill Lynch said it expects gold prices to rise to $1,350 an ounce by the third quarter of the year.

The Bank of Canada could raise rates as soon as next week, Action Economics said, as the recent swathe of positive labor market data may force the central bank’s hand on monetary policy tightening.

Nomura’s George Buckley – who correctly predicted that the Bank of England would hike interest rate in November – said recently that there is room for more rate hikes, estimating the Bank of England would raise rates four times by the end of 2019 to curb inflation, which is running well above target.

Gold Eases In Asia After China Consumer Prices Come In A tad Weaker Than Seen
 

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

 
Are you sure you want to delete this chart?
 
Write your thoughts here
 
Replace the attached chart with a new chart ?
Post
Post also to:
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
 
Replace the attached chart with a new chart ?
Post 1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email