Gold prices fell to their lowest in a month after
China revealed data that showed that the country was a long way away from
picking up momentum in economic growth.
Gold futures for delivery in December fell $22.10 to
close at $1,737.60 an ounce, which is the lowest since September 12, a day
before the U.S. Federal Reserve had announced new measures to revive the
economy.
China's inflation figure slowed to 1.9 percent in
September compared to 2 percent in August, while imports rose by 2.4 percent, a
marginal improvement from the previous month but still weak by its standards.
Economists are not expecting much pick-up in China's
economic growth in the September quarter and estimates are that it will be lower
than the 7.6 percent growth achieved in the June quarter, which was a
three-year low.
China will be releasing growth figures for its economy
later this week.
Gold is usually an investment used as a hedge against
inflation especially when currencies depreciate. Gold prices have been rising
through most of the summer months when investors were expecting the European
Central bank and U.S. to come up with new measures to stimulate their
economies.
There is speculation whether China would announce any
more measures to boost growth. Last month it had announced an ambitious
spending plan on infrastructure projects to kick-start investment in the
economy.
While China is growing faster than many of the
advanced economies, still it is not doing as well as it is expected. Demand in
China functions as a major catalyst of growth for other economies as well.
SPDR Gold Trust (ETF)(NYSEARCA:GLD) fell 1%, iShares
Silver Trust (ETF)(NYSEARCA:SLV) clumped 2.50%.
Gold mining stocks were also under pressure with Goldcorp
Inc. (USA)(NYSE:GG) was down 0.09% to $43.43, Barrick Gold Corporation
(USA)(NYSE:ABX) slid 0.46% and Newmont Mining Corp(NYSE:NEM) fell 0.62%.
However, Kinross Gold Corporation (USA)(NYSE:KGC) rose
0.30% and Yamana Gold Inc. (USA)(NYSE:AUY) rose 1.28% to $18.93.
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