Aussie dollar climbing… is the iron ore trade back on?
Simandou, one of the world’s most significant iron ore developments, is set to challenge the Pilbara’s dominance soon.
The world’s second largest economy is slowing down and dragging all resource-based economies down with it.
China’s leaders want to move the country from an investment-led economy to one based on consumption.
But the rebalancing is proving difficult and signs of a slowdown are not hard to find.
Consensus forecast for 2014 growth in China is 7.4%, just below the official target rate set by the government. GDP expansion at 7.4% would be the slowest in 24 years.
Something that’s causing alarm among resource companies reliant on Chinese demand.
Jeffrey Gundlach, co-founder and chief investment officer of DoubleLine Capital, last week made some choice comments on the outlook for China and gold.
Reuters reports speaking at the $49 billion fund’s annual investment conference in New York, Gundlach said that he liked gold, but that China’s in deep trouble:
“I’m actually sort of fond of gold as a diversifier now,” he said, adding however that he isn’t convinced gold will reach $10,000 an ounce.
[…]
“A 23-fold increase in the economy has got to be due for not just a plus 7 – how about a minus 7”, he said in reference to Chinese economic growth.
