Breaking News
LAST CHANCE for Cyber Monday SALE: Up to 54% off InvestingPro! Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Gold Edges Lower as Chinese Stimulus Hope Supports Risk Appetite

CommoditiesFeb 17, 2020 15:02
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters.

By Geoffrey Smith -- Gold prices were fractionally lower on Monday, largely unmoved by either virus-related concerns or by worse-than-expected growth numbers from Japan.

In quiet trading subdued by the U.S. Presidents Day holiday, gold futures were down 0.1% from Friday’s close at $1,584.45 a troy ounce by 8:04 AM ET (1304 GMT). Spot gold was down 0.2% at $1,581.76 an ounce.

Silver futures were up 0.2% at $17.78, while platinum futures were up 0.2% at $970.65. Copper futures, which tend to reflect anticipation of industrial activity, hit a three-week high of $2.63 a pound before easing off a cent. They were still up 0.8% on the day.

The moves came against the backdrop of a jump in Chinese equity markets – echoed more weakly in Europe – after President Xi Jinping hinted at more stimulus measures to support the economy in an editorial over the weekend.

The stronger tone in stocks capped gains in gold, despite further evidence of a spreading economic slowdown due to the virus: Thailand and Singapore both cut their growth forecasts for 2020, citing the impact of lower Chinese tourist arrivals.

Meanwhile Japan, another favored destination for Chinese tourists, said its economy contracted more sharply than expected in the fourth quarter, at an annualized rate of 6.3%. That was much worse than the 3.7% contraction expected after the double-whammy in October of a sales tax hike and Typhoon Hagibis.

“Gold appears to be stuck in no man's land for now mired in the $1,560-1,590 range, with trading volumes somewhat depressed since the beginning of the year,” said AxiTrader market strategist Stephen Innes. However, he noted, “Gold is very much on everyone's radar, which suggests bids will remain firm on dips to $1,575-65 levels,” especially now that expectations of further cuts from the Federal Reserve have risen.

Portfolio investors have still reduced their hedging against a pandemic somewhat: the net long position reported in the Commodity Futures Trading Commission’s Commitment of Traders report on Friday was the lowest in six weeks, after the biggest weekly fall since October.

Of note in Europe later, finance ministers from the euro zone are due to discuss a document that could lead ultimately to a relaxation of the fiscal rules governing the bloc, allowing more room for fiscal stimulus and reducing the risk of further rate cuts from the European Central Bank. Given that the ECB’s negative rates are the most important pillar for European portfolio purchases of gold, any clear commitment to fiscal easing could be marginally negative for gold.

Gold Edges Lower as Chinese Stimulus Hope Supports Risk Appetite

Related Articles

Omicron rattles oil markets but impact unclear
Omicron rattles oil markets but impact unclear By Reuters - Nov 29, 2021

By Florence Tan, Heekyong Yang and Noah Browning (Reuters) - The Omicron coronavirus variant kicked oil prices lower late last week and has sapped refining margins, but with crude...

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’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
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.
Comments (1)
Deepak kumar
Deepak kumar Aug 08, 2020 4:08
Saved. See Saved Items.
This comment has already been saved in your Saved Items
gold down
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
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'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
Sign up with Email