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Gold price hits three week low as US economy looks up and China mining production dips

Gold hit a three week low over the bank holiday weekend, dropping to $1,255.50 an ounce — the lowest since April 10, according to FactSet data. A prolonged dip has now seen a more bearish view towards the yellow metal.

Geopolitical tensions, stoked by fears of a Le Pen victory in France and conflict in the Korean peninsular, had kept the price buoyant this year. However these upward pressures have now appear to have been overtaken by a resilient US economic outlook which had pushed the metal down.

“When headlines began to cross about a 4.3% Q2 reading in the Atlanta Fed’s ‘GDPNow’ model forecast, there was a sharp drop in both Treasurys and gold futures,” Tyler Richey, co-editor of the Sevens Report, told MarketWatch.

The Atlanta Fed tracker of GDP points to a strong rebound for the second quarter after the slowest quarter in three years. The GDPNow model forecasts 4.3% growth. That would be the strongest growth since the third quarter of 2014.

“If the economy were to grow at that pace in Q2, that would have hawkish policy implications that are bearish for both Treasurys and gold,” said Richey.

In other news, gold production in China has taken a significant slump in the last quarter according to S&P Global Platts. The firm’s report said the world’s top gold producer and consumer, China, had produced 101.197 mt (2.95 million oz) of gold in the first quarter of 2017, decreasing 9.3% from 111.563 mt achieved a year earlier. The information was released by the China Gold Association on Friday.

Mined gold accounted for 79.6% of China’s first-quarter gold output at 80.542 mt, slipping 8.4% from 87.93 mt in the same 2016 period, it said. While the reason for this wasn’t immediately clear an overhaul of antiquated processes and older, less economic, mines is a factor.

Link to this article: : http://www.goldmadesimplenews.com/gold/gold-price-hits-three-week-low-as-us-economy-looks-up-and-china-mining-production-dips-13112/

Posted by on May 2 2017. Filed under Gold News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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