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.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery – the most active contract – came under heavy selling pressure losing more than $20 to $1,274.90 an ounce in pre-open trade Thursday, a two month low.
The gold price failed to consolidate above the psychologically important $1,300 level on the back of safe haven buying spurred by the turmoil in Ukraine and Iraq, giving up more than half the gains of the June-July rally and falling below its 200-day moving average – a bearish technical sign.
A note from investment bank analysts at UBS out yesterday (before today’s pullback) argues that unlike the historical trend of an up September, this year September may turn out to be a particularly weak period for the gold price:
“July, August and September are typically gold’s strongest performing months. But gold dropped 2.74% in July, and while it’s currently up 1.05% in August, its grasp on those price gains looks very tentative […] [B]arring a move to $1200, physical demand from China is likely to remain quite subdued in the months ahead. This means that gold is lacking physical support from its biggest physical market, implying that the seasonality trade for September – gold’s best performing month historically – is unlikely to follow its long-term trend.”
