Gold Slides as Demand for Haven Wanes After Gains in Stocks

  • Slowing Chinese growth still better than market's worst fears
  • Investors boost holdings in ETPs to highest since December

Gold fell for the second time in three sessions as concerns on China’s economic growth eased, boosting global equities and curbing demand for haven assets.

The MSCI All-Country World Index of equities rallied, as the Shanghai Composite Index jumped 3.2 percent after a report showed Chinese growth was in line with government targets.

Gold has gained in 2016 as concern over slowing growth in China’s triggered global market turmoil and sparked demand for haven assets. While official figures showed Chinese growth slowed at the end of last year, the data weren’t as dire as some investors had predicted and left the door open for authorities to do more to support the nation’s transition to a consumer-led expansion.

“We have a lot less fear about equity markets selling off, and they’ve stabilized at the moment,” Frank Lesh, a trader at FuturePath Trading LLC in Chicago, said in a telephone interview. “It’s just a loss of that haven demand that’s driving gold lower.”

Gold futures for February delivery slipped 0.1 percent to settle at $1,089.10 an ounce at 1:37 p.m. on the Comex in New York. Futures climbed 2.9 percent this year through Jan. 15.

China’s full-year expansion of 6.9 percent, the least since 1990, was in line with the government’s target of about 7 percent.

Investors increased holdings in exchange-traded products backed by gold by 0.3 percent as of Jan. 15, data compiled by Bloomberg showed. Assets rose 4.4 metric tons to 1,489.1 tons, the highest since early December.

Platinum futures for April delivery rose as much as 1 percent to $836 an ounce on the New York Mercantile Exchange, helping shares of miners. Anglo American Platinum Ltd jumped 6.2 percent in Johannesburg, the second-best performance in the Bloomberg World Mining Index, and Impala Platinum Holdings Ltd. rose 1.4 percent.

AngloGold Ashanti Ltd., the world’s third-biggest gold miner, dropped 3 percent.

Palladium futures also advanced on the Nymex, while silver gained on the Comex.

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