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Gold Up Over 1% on ECB Comments, China Data

Release Date: 
Thursday, January 10, 2013

Gold Up Over 1% on ECB Comments, China Data

The price of gold rose over 1% after European Central Bank President Mario Draghi said economic weakness in the region will continue, boosting speculation that policy makers will do more to revive growth.  The European Central Bank also gave no hints on near-term rate cuts.

“The economic weakness in the euro area is expected to extend into 2013,” Draghi said at a press conference in Frankfurt today.

The European Central Bank also gave no hints on near-term rate cuts.

"We would take away from Draghi's comments that the bar to another rate cut is higher than seemed to be the case last month," Brown Brothers Harriman said in a note to clients.

The metal also rose after better-than-expected China trade data spurred optimism that demand for raw materials will increase.  China's export growth rebounded from a three-month low, expanding at the fastest rate in seven months, data showed on Thursday.

"The overall (Chinese) trade data is looking positive in terms of exports," Citigroup analyst David Wilson said.

(Sources: “PRECIOUS-Gold tops $1,675 on ECB comments; PGMs surge,” Reuters, January 10, 2013; “Gold Climbs to One-Week High as Draghi Sees Weakness,” Bloomberg, January 10, 2013)

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†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

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