Safe haven commodities Gold futures rose moderately on Tuesday amid a weaker dollar, as further indications of a weakening economy in China and the timing of a possible interest rate hike from the Federal Reserve remained in focus. Federal Reserve rate hikes is possible happen in September
As we reported from investing, Gold for December delivery traded in a range between $1,333.70 and $1,147.30 an ounce, before settling at $1,140.40, up 7.90 or 0.70% on the session. Following a four-day losing streak last week, gold futures have now closed higher in three of the last four sessions. The precious metal has gained approximately 4% in value over the last month of trading. Gold as a Safe Haven Currency for Commodities is slightly rose
Gold prices likely gained support at $1,108.50, the low from August 18 and was met with resistance at $1,169.80, the high from Aug. 24.
Meanwhile In overnight trading, China's official manufacturing purchasing index (PMI) slumped to a three-year low in August, falling to 49.7 from a reading of 50 in July. Any reading below 50 typically provides an indication that the sector is on the verge of suffering a recession. China is starting a recession Era Separately, Caixin's index of smaller factories in China plunged to a six-year low of 47.3 in August from 47.8 in July. The world's second largest economy is on pace for its slowest expansion in nearly a decade, amid sharp decreases in exports and structural shifts in its productivity, capital and workforce. China devalue the China yuan is one of the big step to stimulate the exports
As reported from IMF, Christine Lagarde, the head of the International Monetary Fund, expressed significant concern with the steep transition the Chinese economy faces in the coming months in her first public comments since the People's Bank of China rattled global equity markets last week. Speaking in Jakarta, Lagarde cautioned investors on the spillover effects that could be created from persisting weakness in China's economy. Systemic effects on emerging markets especially south east Asian
International monetary fund Christine Lagarde said "As the Chinese economy is adjusting to a new growth model, growth is slowing—but not sharply, and not unexpectedly. The transition to a more market-based economy and the unwinding of risks built up in recent years is complex and could well be somewhat bumpy," Lagarde said. "That said, the authorities have the policy tools and financial buffers to manage this transition. Other emerging economies, including Indonesia, need to be vigilant to handle potential spillovers from China's slowdown and tightening of global financial conditions."
Gold futures is slightly rose is good for China, we knew that China is the world's largest producer of gold and the second-largest consumer behind India.
Back to New York, In the U.S. the PMI index for August fell to 53.0, below a level of 53.8 a month earlier. The reading fell within the consensus range of forecasts between 52.7 and 54.0. Still, manufacturing growth slowed to its lowest level since October, 2013, amid weakness in new orders and moderate gains in backlog orders.
The safe haven currency US dollar index which measures the strength of the greenback versus a basket of six other major currencies, fell to an intraday low of 95.21 before rebounding slightly to 95.53 in U.S. afternoon trading.
Forex trader's and Investors could be hesitant to make any significant trades ahead of the Federal Open Market Committee's two-day meeting beginning on Sept. 17. Last week, Fed vice chairman Stanley Fischer sent strong indications that the U.S. central bank could raise short-term interest at the meeting. Brings more possibility for the Federal Reserve rate hikes
Source : Investing, international monetary fund, China caixin index
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