Gold News & Info

Source: American Gold Exchange

Austin— Gold fell slightly and silver lost 2.5% as China cut its growth target for the first time since 2005. Along with soft U.S. and eurozone economic data, the news of China's cooling economy damped risk appetite and sent equities lower. With the world's second largest economy, China has been the engine of global recovery. Its cooling economy reflects slower growth in emerging markets and Europe. The Markit eurozone composite PMI fell to 49.3 in February, indicating a contraction in private-sector business activity. And U.S. factory orders fell in January for the first time in three months, a sign that the crucial manufacturing sector is cooling. All four precious metals lost ground.

At the close: April gold lost $5.90 to $1,703.90; May silver dropped 87 cents to $33.69; April platinum fell $29.10 to $1,662.60; and June palladium slid $5.60 to $706.95 an ounce.

Following last week's 3.7% correction, the gold and silver markets may experience more short-term weakness before stabilizing, especially in the face of cooling global economies. But the macroeconomic fundamentals remain favorable for higher gold prices, especially negative interest-rate environment, long-term inflationary risk due to unprecedented monetary easing, and lingering concerns over sovereign debt in the eurozone and U.S. As of last Friday, investments in gold-backed exchange-traded products (ETPs) rose to a new record 2,405.2 tons, and hedge funds increased bets on higher prices by 10%, as Bloomberg reported today.