Market losses were exacerbated in all asset classes yesterday following data that showed that China's economy expanded more slowly than expected. Many investors happened to jump, pull their ripcord and sought shelter in risk averse trading positions. Since then, the extreme market moves, especially within the commodity class, had some investors looking for bargains after the heavy market losses. Gold this morning has managed to get itself off the floor and bounce into positive territory from a two-year low. Risk aversion carried the yen higher than the market had expected, but USD/JPY's rebound through Asia and Europe, without fresh news, suggests that this recent correction could be over.
The yellow metal has been trying very hard to lose its "shine", however, despite printing a new two-year low during the Asian session the commodity is standing upright this morning. Capital Markets have been consumed with commodity price moves over the past-two sessions - attribution for gold's two-day break is given to a huge sell order (+400-tonnes) from last Friday. Not helping matters and providing a significant dent to investors' risk psyche was the below expectation GDP growth figures from China over the weekend. Has the market been able to break the commodity bulls' back? Not yet broken, but very much strained as major weekly support now appears at $1,325 and resistance topside above $1,413 and $1,436.
