Metals Price Watch: Gold Price up on QE Hopes and China GDP Data

on Jul 15, 2013
Listen, Monday, July 15: The gold price has gained one percent today as concerns eased that the US Federal Reserve would soon scale back its debt purchases. Bullion is advancing after recording its biggest one-week gain in nearly two years.

Copper price has declined of the London Metal Exchange pressured by stronger US dollar and concerns over Chinese growth. The other base metals have also fallen.
**Gold and silver**
Bullion continued its rally triggered last week by signals that the Fed is committed to continue to maintain the quantitative easing (QE) programme, which has been supporting the gold price in recent years. Spot gold has risen by about 0.2 percent to $1,286.49 an ounce by 14:43 GMT. Last week the metal gained almost five percent, the most it has risen in a single week since October 2011.

“People are still buying after Bernanke’s assurance,” said a Hong Kong-based trader, as quoted by Reuters. “They were expecting the tapering (in stimulus) to begin in September but now they think there is a possibility of it happening only next year.”
The metal price also found support in Chinese GDP growth data for the second quarter, which matched expectations. China’s economic growth slowed to 7.5 percent in the period under review, from 7.7 percent in the previous quarter.

Some analysts believe that the current gold price rally won’t last long.
“Our economists continue to expect the [Federal Open Market Committee] to taper asset purchases at the September meeting and conclude purchases in March 2014,” Barclays analysts wrote in a note on Monday. “Given our economists’ view and seasonally weak period for demand, we believe the recent rally (in gold) is likely to be short lived.”

The silver price has remained largely unchanged today and was trading at $19.86 an ounce as of 14:55 GMT.
**Base metals**
!m[Copper Price Falls as Dollar Rises](/uploads/story/3995/thumbs/pic1_inline.jpg)
China’s GDP data, which has helped bullion, has had the opposite effect on the copper price as it reinforced concerns over China’s economic slowdown. Still, the fact that the figures came in line with expectations helped the price contain losses. Copper for delivery in three months has fallen to $6,920 a metric ton on the LME today from $6,954 at Friday’s close.

“The dollar is firming, and that seems to be applying a bit of pressure on metals. There are also ongoing concerns about growth in China,” Societe Generale analyst Robin Bhar said, as quoted by Reuters.
The other base metals have also declined in London. The aluminium price has slid to $1,830 a metric ton from $1,843 on Friday; the tin price has dropped to $19,350 from $19,500; the lead price has lost $8 to $2,063. Nickel has been at $13,450 from $13,750 and zinc at $1,890 from $1,903.


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