Gold futures slumped to a six-week low as signs of slowing growth in China dimmed the outlook for commodities demand.
Foreign direct investment slid for the 10th time in 11 months, China’s government said today. The dollar gained as much as 0.4 percent against a six-currency basket on speculation this week’s European Union summit in Brussels will fail to provide clarity on potential financial aid for Spain. The Standard & Poor’s GSCI Spot Index of 24 raw materials tumbled as much as 1.4 percent.
“The gold bulls are nervous about the hitherto slowing Chinese economy and the impact that this will have on overall commodity demand,” Jon Nadler, an analyst at Kitco Inc., a precious-metal refiner and research company in Montreal, said in a report. “Meanwhile, the nebulous situation in Europe continues to unnerve speculators as well.”
Gold futures for December delivery fell 1.2 percent to settle at $1,724 an ounce at 1:40 p.m. on the Comex in New York. Earlier, the metal touched $1,716, the lowest since Sept. 7.
Prices have dropped 3.2 percent in two weeks on concern that global central banks will reduce stimulus measures, curbing demand for the metal as a hedge against inflation. Government reports this week showed China’s industrial production, retail sales and fixed-asset investment accelerated in September, while U.S. housing starts jumped to a four-year high.
“When it comes to China, it seems that gold is now unable to benefit from either bullish or bearish economic news from that country,” Nadler said.
Silver futures for December delivery slid 2.3 percent to $32.097 an ounce in New York, extending the weekly drop to 4.7 percent.
On the New York Mercantile Exchange, platinum futures for January delivery slipped 1.7 percent to $1,615.50 an ounce. Palladium futures for December delivery retreated 3.7 percent to $623 an ounce.