Falling gold prices revive physical demand in key markets
Consumers in price sensitive regions such as India had been finding it difficult to cope with gold's rally in recent months.
Prices of iron ore futures strengthened for the third straight session on Wednesday, as firmer steel output outweighed a raft of weaker economic data in top consumer China.
The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 1.08% higher at 792.0 yuan ($109.19) a metric ton.
The benchmark December iron ore on the Singapore Exchange was 1.11% higher at $103.7 a ton by 0723 GMT.
“Iron ore markets again marked time above $100 with the increase in Chinese steel production supporting prices,” Westpac analysts said in a note.
China’s steel output remains well above average rates for this time of year, with production over the last three weeks up 9.5% versus the average for the same period in the previous three years, Westpac said, citing data from the China Iron and Steel Association.
China is both the world’s top consumer and producer of the metal.
Still, the country’s industrial profits fell again in October.
Demand remains soft in the crisis-hit economy, with consumer prices at a four-month low while industrial output continues to trend downward and October new home prices fell at their fastest pace in nine years.
Meanwhile, Chinese state media warned US President-elect Donald Trump his pledge to slap additional tariffs on Chinese imports could drag the world’s two largest economies into a mutually destructive tariff war.
On Monday, Trump said he would impose “an additional 10% tariff, above any additional tariffs” on imports from China. He had previously said he would introduce tariffs in excess of 60% on Chinese goods.
Other steelmaking ingredients on the DCE were weaker, with coking coal and coke down 1.26% and 0.78%, respectively.
Steel benchmarks on the Shanghai Futures Exchange posted marginal losses. Rebar dipped 0.03%, hot-rolled coil edged 0.06% lower, wire rod shed about 0.4% and stainless steel dropped around 0.7%.
($1 = 7.2535 Chinese yuan)
(By Gabrielle Ng; Editing by Sherry Jacob-Phillips and Eileen Soreng)
Comments