BLBG:Gold May Decline as Slower China Output Tempers Liquidity Boost
Gold may decline after a report showed that China’s manufacturing may contract for a fifth straight month in March, hurting the outlook for commodities.
Spot gold traded little changed at $1,649.82 an ounce at noon in Singapore, paring a 0.4 percent advance. The preliminary 48.1 reading of the HSBC Holdings Plc and Markit Economics index today is a four-month low, and compares with a final 49.6 in February. A number below 50 indicates contraction.
“A slowdown in China is beginning to seem very real and the PMI number hurts sentiment in commodities, including gold,” said Chen Yonglin, an analyst at CITIC Newedge Futures Co.
The April-delivery contract was little changed at $1,649.40 an ounce on the Comex, trimming an earlier 0.4 percent gain. Holdings in exchange-traded products were unchanged at 2,402.034 metric tons yesterday, according to data compiled by Bloomberg. That’s the least since Feb. 28.
Gold earlier climbed alongside equities as China lowered reserve requirements for 379 branches of Agricultural Bank of China Ltd., the nation’s third-biggest lender by market value, expanding a trial that had cut requirements for 563 branches.
“News of increased liquidity in China always cheers the market,” said Tao Jinfeng, chief investment consultant at Haitong Futures Co.
Spot platinum, this year’s best-performing precious metal, dropped for a third day, falling as much as 0.4 percent to $1,632.75 an ounce, and last traded at $1,633. Prices dropped below gold for a second day, with 1 ounce of platinum buying as little as 0.9885 ounce of bullion, the least since March 12, according to data tracked by Bloomberg.
Cash silver lost as much as 0.3 percent to $32.0525 an ounce, reversing an advance of 0.7 percent, and last traded at $32.1075. Palladium declined for a third day, retreating as much as 0.6 percent to $682 an ounce, and was last at $682.75.
To contact the reporter on this story: Glenys Sim in Singapore at gsim4@bloomberg.net
To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net
