Rise of China’s Xinjiang as coal hub undercuts climate goals
Output has surged 22% this year, the fastest growth of any region in China.
The gold price tried to regain the psychologically important $1,300 an ounce level on Friday after slightly disappointing jobs number out of the US and a losing streak on Wall Street sent investors back into gold.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery closed at $1,295 an ounce, up $12 from Thursday’s trading session.
The US economy added 209,000 jobs in July – the sixth straight month of 200,000-plus gains for the first time since 1997 – but the unemployment rate edged up to 6.2% from 6.1%. The below-forecast numbers hurt the dollar which usually move in the opposite direction of the gold price.
Friday’s performance was in contrast to Wednesday’s when gold first fell back below $1,300 after US gross domestic product grew at a 4% annual pace in the second quarter; well above expectations.
Standard Bank in a research note says despite Friday’s gains the risk for the gold price remains to the downside.
According to commodity strategist Walter de Wet while demand from China and South East Asia has improved since the slump witnessed in May, June and most of July demand for gold from Asia remains very price-sensitive.
Premiums on the Shanghai Gold Exchange improved to above $4 an ounce for the first time since May, but should US economic data disappoint – like it did on Friday – and the gold price rally, “Asia demand will likely back off again.”
Premiums on the SGE topped out at $37 when gold was trading around $1,200 last year.
Chinese gold jewellery demand – the biggest component of the country’s demand for the metal – fell for the first time since 2006 in the second quarter and could drop as much as 20% for 2014, according to a new study by Thomson Reuters GFMS, a commodity research house, released last week.
