Gold prices rebound in early Asia, but copper down on
China import data
Gold rebounded in Asia on Monday froma downbeat close
last week, butcopper fell
as China released trade data at the weekend that showed a sharp drop in imports
even as exports surged
On the Comex division of the New York Mercantile Exchange, gold futures for
April delivery rose 0.43% to $1,169.30 a troy ounce.
Elsewhere on the Comex, silver futures for
May delivery gained 0.13% to $15.828a troy ounce.
Meanwhile, copper for May delivery fell 0.32% to $2.599 a pound.
For the week, Comex copper declined 9.0 cents, or 3.08% amid ongoing concerns
over the health of China's economy.
The Asian nation is the world’s largest copper consumer, accounting for almost
40% of world consumption last year.
On Sunday, China reported a trade surplus of $60.6 billion in the
January-February period, compared to expectations for a surplus of $10.8
billion and up from a surplus of $60.0 in January.
Exports surged 48.3% from a year earlier last month, above expectations for a
14.2% increase, while imports tumbled 20.5%, much worse than forecasts for a
decline of 10.0%.
Last week, gold plunged to the lowest level in more than three months on
Friday, as robust U.S. nonfarm payrolls data boosted expectations that the
Federal Reserve will start raising rates sooner rather than later.
It was the biggest one-day loss since December 2013 and helped wipe out the
precious metal's gains so far this year.
The Labor Department reported that the U.S. economy added 295,000 jobs in
February, far more than the 240,000 forecast by economists, while the
unemployment rate ticked down to 5.5% from 5.7% in January, the lowest since
May 2008.
The robust jobs report fuelled expectations that the Federal Reserve will start
raising interest rates as early as June.
Expectations of higher borrowing rates going forward is considered bearish for
gold, as the precious metal struggles to compete with yield-bearing assets when
rates are on the rise.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal
as an alternative asset and makes dollar-priced commodities more expensive for
holders of other currencies.
Meanwhile, the euro sank to an 11-year low against the dollar after European
Central Bank President Mario Draghi confirmed that it will begin purchasing
euro zone government bonds on Monday under its new quantitative easing program.
The combined monthly asset purchases will amount to €60 billion per month and
are expected to run until September 2016.
In the week ahead, markets will be watching talks on Greece by euro zone
finance ministers in Brussels on Monday, while Thursday’s U.S. retail sales
report will also be closely watched for further indications on the strength of
the recovery.