Gold eases as China data boosts risk sentiment
* Palladium jumps over 4 pct to two-week high
* China Q1 GDP up 6.4 pct vs analysts' expectations of 6.3
* SPDR Gold holdings down 4.5 pct so far in 2019
* Weaker dollar limits gold's decline
(Updates prices, adds comments)
By Brijesh Patel
April 17 (Reuters) - Gold eased on Wednesday, holding near
the 2019 lows touched in the previous session, as economic
growth data from China assuaged concerns about global growth and
drove investors into riskier assets.
Spot gold dipped 0.1 percent to $1,274.43 per ounce
as of 12:40 p.m. EDT (1640 GMT), after having fallen as much as
1.2 percent to $1,272.70, its lowest since Dec. 27, on Tuesday.
U.S. gold futures were flat at $1,276.70.
"The pretty good Chinese data implies the concerns of a
slowdown in global growth have been mitigated to a great extent,
which should elevate risk appetite, in turn pressuring gold,"
said Bart Melek, head of commodity strategies at TD Securities
China's economic growth in the first quarter remained steady
at 6.4 percent, topping expectations for a 6.3 percent
The data boosted global appeal for riskier assets and pushed
overall gains in stock markets.
However, a slightly weaker dollar gave some support
for bullion, analysts said.
On the technical front, gold's break below the
psychologically significant $1,300-per-ounce mark and other key
support levels, including the 100- and 50-day moving averages,
signaled a further downside to prices, analysts and traders
Further weakness in gold is possible in the near term,
potentially testing the $1,259 level, which is likely to hold,
Commerzbank analysts wrote in a research note.
Holdings of SPDR Gold Trust, the world's largest
gold-backed exchange-traded fund, have fallen 4.5 percent this
On the flip side, gold was likely to climb toward $1,400,
while silver could rise to $17 per ounce by year-end since
overall weak global growth could take a toll on both equity
prices and risk appetite, analysts at Capital Economics said in
"That said, we expect risk appetite to gradually return as
the U.S. economy picks up," it said.
Silver was down 0.3 percent to $14.92 an ounce.
Meanwhile, spot palladium jumped more than 4 percent
to a near two-week high at $1,406.81 an ounce. The metal had
soared to an all-time peak of $1,620.53 last month driven by a
stark supply deficit.
Platinum rose 1.2 percent to $887.30.
"Strong GDP data from China showed the economy is starting
to hit back up again ... greater growth will see the economy
expanding, translating into more demand for vehicles, in turn
boosting demand for both platinum and palladium," said Phillip
Streible, senior commodities strategist at RJO Futures.
Both metals are primarily consumed by automakers for
catalytic converter manufacturing, but platinum is more heavily
used in the diesel vehicles that have fallen out of favor since
the Volkswagen emissions-rigging scandal broke in 2015.
(Reporting by Brijesh Patel in Bengaluru, editing by G Crosse)
First Published: 2019-04-17 03:19:33
Updated 2019-04-17 18:58:38
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