Gold declined to the lowest level in more than two weeks on speculation that China may not need additional stimulus after exports grew more than estimated in September. Silver fell to a one-month low.
Gold for immediate delivery fell as much as 0.7 percent to $1,741.75 an ounce, the lowest price since Sept. 26, before trading at $1,745.10 at 1:45 p.m. in Singapore. Bullion for December delivery dropped as much as 1 percent to $1,742.60 on the Comex in New York, also the lowest since Sept. 26.
China’s exports increased 9.9 percent from a year earlier, the customs administration said Oct. 13. That was more than the 5.5 percent median estimate in a Bloomberg survey of economists. U.S. consumer confidence unexpectedly jumped in October, a report showed Oct. 12. At an International Monetary Fund meeting yesterday, China’s central bank official Yi Gang said that bubble risks remain in housing markets in major cities and stimulus will be restricted to an “appropriate” level.
“That might mean there’s less chance of stimulus or the size of the stimulus might be a bit less,” said Alexandra Knight, an analyst at National Australia Bank Ltd. “Precious metals have benefitted a lot from speculation about increased stimulus over the last few weeks.”
Gold jumped 11 percent in the third quarter, the most since June 2010, as the Federal Reserve announced a third round of quantitative easing, or QE, and China approved infrastructure spending plans. The European Central Bank held interest rates at a record low this month after agreeing on an unlimited bond-purchase program in September. The Bank of Japan kept an asset-purchase fund at 55 trillion yen ($702 billion) after adding 10 trillion yen last month.
Bullion rose 70 percent as the Fed bought $2.3 trillion of debt in two rounds of QEs from December 2008 through June 2011.
China’s gold imports from Hong Kong fell 29 percent in August from July as higher prices deterred buyers, Hong Kong government data show. China is the largest buyer of the metal after India.
Cash gold of 99.99 percent purity on the Shanghai Gold Exchange fell as much as 1.5 percent to 352 yuan ($56.2) a gram.
Consumer prices in China rose 1.9 percent in September from a year earlier, the National Bureau of Statistics said today. That’s near the slowest pace for inflation in two years, giving the government room to ease policies. Beijing has refrained from implementing stimulus on the scale of the 4 trillion yuan package it unleashed at the end of 2008, confining its response to measures such as two cuts in interest rates, reductions in bank reserve requirements and accelerated investment approvals.
Spot silver dropped as much as 1.4 percent to $33.05 an ounce, the lowest since Sept. 13, and was at $33.23.
Platinum for immediate delivery fell as much as 1.1 percent to $1,633.50 an ounce, the lowest since Sept. 27, and traded at $1,645.49. Palladium was 0.3 percent higher at $636.50 an ounce, after dropping as much as 0.6 percent to $630.50, the lowest since Oct. 1.