Gold prices up in Asia despite disappointing China trade data
Gold prices rose in Asia on Monday, shrugging off disappointing trade data in China that triggered safe haven buying along with the Bank of Japan March board meeting minutes expressing caution on aggressive monetary easing. On the Comex division of the New York Mercantile Exchange, gold futures for June delivery rose 0.12% to $1,206.10 a troy ounce.
Elsewhere on the Comex, silver futures for May delivery rose 0.28% to $16.428 a troy ounce. Also in metals trading, copper for May delivery was up 0.25% at $2.742 a pound.In addition to trade, copper traders are looking ahead to a raft of Chinese economic data in the week ahead, including reports on first quarter gross domestic product, as well as data on industrial production.
The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.
A few Bank of Japan board members expressed the view that the BoJ must pay closer attention to developments in the Japanese government bond market and the impact of an aggressive easing policy, according to minutes from the March policy meeting released Monday showed.
“A few members pressed the view that, in pursing QQE, it was important to carefully assess the mechanism of price formation in the JGB (Japanese government bond) market as well as examine and compare the positive effects and side effects of JGB purchases,” the minutes showed. The BOJ is currently buying about ¥80 trillion of JGBs annually.
Earlier, Japan said core machinery orders jumped 5.3% year-on-year in February, well above the gain of 3.7% expected. Then, China said March exports slumped 14.6%, compared to a 12.0% year-on-year gain expected in March, while imports fell 12.3%, compared to an expectation of down 11.7% and a trade balance surplus of $3.08 billion, well below a $45.35 billion surplus seen.
Last week, gold prices rose for the first time in three sessions on Friday, amid speculation key U.S. data next week will add to evidence that the economy slowed in the first quarter.
Futures are up more than 5% since hitting a recent low of $1,140.60 on March 17, as indications that the U.S. economy slowed in the first quarter fuelled bets the Federal Reserve will hold off on hiking interest rates until late 2015.
A delay in raising interest rates would be seen as bullish for gold, as it decreases the relative cost of holding on to the metal, which doesn’t offer investors any similar guaranteed payout. In the week ahead, markets will be looking ahead to Tuesday’s report on U.S. retail sales, as well as Friday’s reports on inflation and consumer sentiment, for further indications on the strength of the economy.