Metals Trading In The Red As Chinese Data Weighs Heavy

Gold ended the week on a positive note at 1324, but eased a bit in the Asian session on Monday giving up $2.60 to trade at 1321.00. Silver followed cues from gold to give up 200 points to trade at 21.615. The negative tone of the markets weighed on both platinum and palladium. Platinum tumbled to 1421.90 giving up $6.90 while palladium lost $4.70 to trade at 737.50. Gold inched lower after posting a third straight week of gains, but the precious metal may get support from worries over the pace of the U.S. economic recovery and China’s growth. Investors on Friday had increased bullish bets on bullion after prices broke through tough resistance at $1,300 an ounce, with weak U.S. manufacturing data and uncertainty over China’s economic expansion lifting the metal’s safe haven appeal.

Markets remain unease as more lackluster data hit the wires this morning. Chinese housing price increases printed lower that in the previous month adding to speculators stress. New-home price growth in China’s first-tier cities slowed in January, National Bureau of Statistics data today showed. Developers in a few large cities have started to cut prices as supply outstrips demand, Last week the flash PMI for February declined to 48.3 – the lowest level in months.

Last week precious metals rallied. The recent U.S reports may have contributed to the slow recovery of precious metals: housing starts and building permits fell by 16% and 5.4%, respectively, during January; existing

home sales dropped to 4.62 million in January; Philly fed index decreased from +9.4 to -6.3 in February; jobless claims slipped by 3k to reach 336k. The minutes of the last FOMC meeting didn’t reveal much more information regarding the future plans of the FOMC. Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.34 percent to 798.31 tonnes on Friday from 795.61 tonnes on Thursday.

Copper retreated 1.2 percent, leading industrial metals lower, as swelling stockpiles in China added to price concerns. London copper fell sharply to its lowest in more than two weeks as worries about tightening monetary policy in the United States and fragile growth in China hurt the demand outlook for industrial metals.  According to data released by China’s State Statistical Bureau this morning, China’s gross domestic product growth was 7.7% in 2013, the slowest since 1999. The figure is slightly above market expectations of 7.6% growth but further slowing down of the economy is expected. Copper futures fell by 0.15 per cent to 3.221 down 29 points today as speculators trimmed their positions due to subdued demand at domestic spot markets amid a mixed trend overseas.