Gold futures headed lower Tuesday as global stock markets rallied and a stronger U.S. dollar weighed on the precious yellow metal.
February gold GCG6, -0.32% lost $5.10, or 0.5%, to trade at $1,085.60 an ounce in early trade. Gold last settled on Jan. 15, up 1.6% but lower for the week, as U.S. metals markets were closed on Monday for the Martin Luther King holiday.
The U.S. ICE Dollar Index DXY, +0.14% a measure of the greenback against a basket of six rival currencies, was 0.3% higher on Tuesday. A strong dollar tends to make assets priced in dollar terms more expensive to holders of other currencies.
A stabilizing China stock market SHCOMP, +3.22% which has been the source of the global market’s recent bout of angst, has provided some support to equities markets while deflating interest in assets perceived as havens, including gold.
An economic reading from China on Tuesday indicated that the country’s economy grew 6.9% in 2015, its slowest pace in 25 years. But the sluggish growth rate has led analysts to believe that Beijing may do more to ramp up economic stimulus.
“This soft GDP announcement compounds to the recent data from China which has followed a negative trajectory and has consequently intensified the mounting anxieties around the slowing pace of growth in the world’s second largest economy,” wrote Lukman Otunuga, research analyst at FXTM, in a Tuesday note.
“With China GDP growth below the golden 7% yearly target, the visible economic slowdown may have further elevated investors’ fears toward the failure of a series of aggressive measures by Beijing to revive growth and as such may reinforce the bearish sentiment toward the Chinese economy,” Otunuga said.
A bearish global growth outlook from the International Monetary Fund also is weighing on the certain commodities The IMF lowered its global-growth outlook to 3.4% from 3.6%.
Meanwhile, March silver SIH6, +1.29% was 16 cents, or 1.1%, higher at $14.06 an ounce.
