Gold ticks down after China's 1q growth eased
Gold inched down on Friday's early trading after the slowdown in China's growth had enhanced demand on the dollar as a refuge, thereby reducing the appeal of the yellow metal.
The shiny metal fell slightly on the daily basis after China's first quarter GDP eased for the fifth consecutive quarter to 8.1% compared with 8.9% in the fourth quarter and median estimates of 8.4%.
Gold was affected by the slowdown in the world's largest gold producer and consumer, where investors resorted to the dollar as a safe have asset.
The U.S. dollar rebounded against a basket of major currencies after yesterday's sharp drop, where the dollar index is currently hovering near 79.45 compared with the day's opening of 79.33, noting that it will find solid support around 79.55 levels, which represents SMA level.
However, gold may rebound in the coming period on mounting speculations China, U.S. and euro area may adopt further stimulus to reinforce the sluggish recovery.
Fed Vice ChairmanJanet Yellen said on Wednesday I consider a highly accommodative policy stance to be appropriate in present circumstances,clarifying that further U.S. easing could be warranted if the recovery proceeds at a slower-than-expected pace.
Also, Beige book released showed that the U.S. economy grew at a modest rate from mid-February till late March.
The latest setback came yesterday after the release of higher than expected initial jobless claims which showed a rise to 380,000 to April 7 compared with predictions of 355,000 while the previous week's reading was upwardly revised to 367,000 from 357,000, adding to evidence there may be a need for further quantitative easing after the economy had recorded in March the fewest job addition since in October.
Later in the day, investors will track U.S. CPI and University of Michigan confidence to see the latest developments in the world's largest economy's data.
Precious gold is currently trading around $1675.80 an ounce, facing tough resistance at these levels as it constitutes SMA 100 level, after it fell to a low of $1671.74 while the day's high was recorded at $1677.04.
Crude oil for May's delivery is currently showing a drop to trade around $103.24 a barrel after opening today's trades at $103.65.