Gold Rebounds In Apparent Bargain Hunt

Gold Rebounds In Apparent Bargain Hunt

Gold prices rose slightly in Asian trading on Wednesday, pointing to a higher move for the the corresponding SPDR Gold Trust (ETF) (NYSEARCA:GLD) this morning in a move that appeared to be tied to bargain hunt after the yellow metal sank yesterday. Investors also appeared to be going for safe-haven assets as China prepares to release its trade data for June. Economists are predicting that China will report declines in both imports and exports.

How gold traded in Asia

Gold contracts for August delivery gained 0.15% during Asian trading hours on Wednesday to $1,337.35 a troy ounce. The move saw the precious metal pare some of the previous day’s losses. Gold sank 1.57% on Tuesday on a day that was characterized by widespread equity gains as both the Dow Jones Industrial Average (INDEXDJX:.DJI) and the S&P 500 (INDEXSP:.INX) hit new records.

The decline in gold prices in the previous session was linked to improvement in investor appetite for riskier invests, especially stocks. Investor fears over an economic slowdown appeared to have subsided following strong jobs data for June. U.S. employers created 287,000 nonfarm jobs last month, a strong rebound from the May slump that saw only 11,000 jobs created. Earlier reports put May jobs at 38,000, but the figure was revised down.

In Britain, The Conservative Party’s move to put its house in order by endorsing Home Secretary Teresa May for the post of Prime Minister also lifted investor sentiment and hurt demand for gold and other safe-haven assets.

The Wednesday gain in gold was linked to investors moving to grab the yellow metal while relatively cheap short term following the Tuesday slide. Another reason cited for the gain in gold prices is the anticipated Chinese trade data for June. Unfavorable Chinese trade data is expected to boost demand for safe-haven assets in China as it signals continued difficulties in the Chinese economy. Economists are predicting that China will report a 4.1% decline in imports and a 5% pullback in exports.

Although China was already struggling with a slowdown in its domestic economy, Brexit has complicated its exports business as well.

Other precious metals

The silver contract for August delivery rose 1.24% to $20.422 a troy ounce on Wednesday while copper futures for September delivery gained 2.58% to $2.270 a pound.