China Export Numbers Contributes to Gold Slide

October 15, 2012 at 07:44

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Gold declined to the lowest level in more than two weeks on speculation that China may not need additional stimulus after exports grew more than estimated in September.

Silver fell to a one-month low.

China’s exports increased 9.9 per cent from a year earlier, the customs administration said on Saturday. That was more than the 5.5 per cent median estimate in a Bloomberg survey of economists.

In the US, consumer confidence unexpectedly jumped in October, a report released at the weekend showed.

At an International Monetary Fund meeting yesterday, Chinese central bank official Yi Gang said that bubble risks remain in housing markets in major cities in China and stimulus would be restricted to an ‘‘appropriate’’ level.

‘‘That might mean there’s less chance of stimulus or the size of the stimulus might be a bit less,’’ said Alexandra Knight, an analyst at National Australia Bank.

‘‘Precious metals have benefited a lot from speculation about increased stimulus over the last few weeks.’’

Gold jumped 11 per cent in the third quarter, the most since June 2010, as the US Federal Reserve announced a third round of quantitative easing, or QE, and China approved infrastructure spending plans.

The European Central Bank held interest rates at a record low this month after agreeing in September on an unlimited bond- purchase program.

The Bank of Japan kept an asset-purchase fund at 55 trillion yen ($US702 billion) after adding 10 trillion yen last month.

Bullion rose 70 per cent as the Fed bought $US2.3 trillion of debt in two rounds of QE from December 2008 through to June 2011.

China’s gold imports from Hong Kong fell 29 per cent in August from July as higher prices deterred buyers, Hong Kong government data show. China is the largest buyer of the metal after India.