Gold Drops to Lowest Since September
Gold dropped, reaching the lowest level since September 7, on worries that economic slowdown in China will damp demand for commodities. China’s government indicated that foreign investment decreased for 10th time in 11 months. Some economists point out that currently it does not matter what kind of news markets get from China as traders tend to perceive them negatively either way. Signs of slowdown scare investors, while signs of faster growth lead to speculations that the policy makers will not add stimulus and that detracts traders from riskier assets all the same.
The European Union summit did not resolve the uncertainty surrounding the bailout for Spain. It is yet unclear if the indebted nations will ask for rescue from the EU. Speculators prefer to be sure about trading environment and the uncertainty drove them away from raw materials, leading to the drop of the Standard & Poor’s GSCI Spot Index by 1.4 percent.
Gold decline from $1,737.38 to $1,722.22 on COMEX.
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