The Wall Street Journal: Gold Climbs on Weak Chinese Trade Data

The associated feature

The Pure Gold Company


The Wall Street Journal reports that a split among US Federal Reserve officials on interest-rate increase helps support the precious metal markets. The Pure Gold Company reports a 24% increase in sales over the week.

Gold prices climbed on Thursday, helped by uncertain prospects for a December U.S. rate rise and weak trade data from China that spurred haven buying.

Gold for December delivery settled up 0.3% at $1,257.60 a troy ounce on the Comex division of the New York Mercantile Exchange.

The precious metal took some support from minutes from the September meeting of the U.S. Federal Reserve that showed policy makers are split over the timing of their next rate increase.

“We’re seeing a bit of relief buying that it’s still not a certainty that the U.S. will lift rates in December,” said Société Générale analyst Robin Bhar.

Gold sold off sharply last week after strong U.S. data, coupled with hawkish Fed commentary, made a December increase appear more likely. Higher rates tend to weigh on gold as it doesn’t pay a return and struggles to compete with yield-bearing assets.

Thursday’s weaker-than-expected trade data from China also supported gold, Mr. Bhar said.

“A bit of risk aversion would have helped gold to pick up a few dollars here and there,” he said.

Global stocks fell after data showed exports from the world’s second-largest economy fell 10% in September, compared with a 3.2% drop predicted by analysts polled by The Wall Street Journal. Declining imports reinforced the picture of weakening global demand.

There was some evidence that the recent selloff in gold — which fell 3.5% on Oct. 4 from a recent trading range above $1,300—gave demand a boost. The Pure Gold Company reported a 24% increase in weekly sales of physical gold, citing “global concerns including another possible Chinese slowdown.”

Mr. Bhar also noted that premiums for gold in Shanghai have widened over London prices in recent sessions, while the Mumbai price has switched to a premium from a discount, suggestive of improving demand from gold’s key markets in Asia.

A weaker dollar helped boost gold prices on Thursday. The WSJ Dollar Index was recently down 0.3% at 88.13. Gold is priced in U.S. dollars and becomes cheaper to foreign buyers when the U.S. currency falls.

—Stephanie Yang contributed to this article.

Source: The Wall Street Journal


"-a 24% increase in weekly sales of physical gold, citing “global concerns including another possible Chinese slowdown.”

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