LONDON—Spot gold traded lower in Europe, weakening as global commodity and equity markets fell in response to concern about slower growth in China and European efforts to contain the region's debt crisis.
The price of gold has increasingly been trading in line with assets seen as relatively risky. Those markets came under pressure overnight in response to news that China's third-quarter gross domestic product grew 9.1% from a year earlier. The result was below economists' expectations for a 9.2% rise and marked the slowest expansion in two years.
Optimism over a resolution to Europe's sovereign-debt crisis also continued to fade, after Germany Monday tempered expectations that European Union leaders will deliver a comprehensive plan to resolve the region's debt crisis at the Oct. 23 summit.
By mid morning, the spot price of gold was $1,657.40 a troy ounce, down from $1,671.20 late in New York on Monday.
"So, gold continues in low volume trading with few macro events, while market participants are desperately looking for reasons to trade and often in the wrong places," said VTB Capital analyst Andrey Kryuchenkov.
Until the summit begins, gold is likely to rise as mounting optimism makes investors more willing to take on risk, and fall when hope fades away, he said. The strength of the dollar will remain a key factor as well, Mr. Kryuchenkov said. A stronger dollar makes gold, which is denominated in dollars, more expensive for holders of other currencies.
In other metals, spot silver was at $31.055 per ounce, down from $31.85 late in New York; spot platinum was at $1,526.50 an ounce, from $1,554 and spot palladium had fallen 1to $603.50 per ounce from about $619. Crude oil futures, base metals and agricultural commodities were all lower as well.
Write to Rhiannon Hoyle at rhiannon.hoyle@dowjones.com
