Gold Prices Retreat as Chinese GDP Data Disappoints

Gold prices experienced a slight setback on Monday, following their largest weekly increase since April. This decline came after weaker-than-expected GDP data was released by China, causing commodities prices to be weighed down.

Price Action

  • Gold futures for August delivery (GC00, -0.16% GCQ23, -0.16%) fell by $3.40, or 0.2%, settling at $1,961 per ounce on Comex.
  • Silver futures for September (SI00, -0.55% SIU23, -0.55%) dropped by 16 cents, or 0.6%, reaching $25.03 per ounce.
  • September palladium (PAU23, -0.47%) decreased by $2.40, or 0.2%, reaching $1,264 per ounce.
  • October platinum (PLV23, -0.28%) experienced a decline of $1.30, or 0.1%, dropping to $983 per ounce.
  • September copper (HGU23, -2.43%) declined by 10 cents, or 2.6%, settling at $3.833 per pound.

Market drivers

China’s GDP growth during the second quarter fell below expectations, with a rate of 6.3%. This was slower than the consensus reading of 7.3% predicted by economists surveyed by FactSet.

Investors responded to the disappointing data by selling off commodities such as crude oil and gold, as they foresaw a potential decrease in demand due to the slowing growth in China.

While the weaker Chinese data has led to concerns about the global economy’s health, gold managed to maintain a price above $1,950 an ounce. Investors and traders remain cautious about fully committing to equities.

The decline in the value of the U.S. dollar helped to minimize the downward pressure on gold. Lower Treasury yields and a falling U.S. dollar were contributing factors to last week’s gold rally.

The ICE U.S. Dollar Index (DXY, -0.05%), which measures the strength of the U.S. dollar against other currencies, experienced a slight decrease of less than 0.1% to 99.90. Additionally, the yield on the 10-year Treasury note (TMUBMUSD10Y, 3.795%) dropped by 3.1 basis points to 3.786%.

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