Gold Prices Climb on China Optimism
NEW YORK (TheStreet) -- Gold prices rose to the highest level in over a month as buyers speculated slowing Chinese growth may lead to monetary policy easing this year.
Gold for February delivery climbed $24.80 to settle at $1,655.60 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,668 and as low as $1,609 an ounce.
Silver prices for March delivery advanced 61.3 cents to $30.135 an ounce while the U.S. dollar index was falling 0.4% to $81.19, also enhancing the appeal of gold as an alternative asset.
Gold extended its gain this year to 5.7% as China's growth fell back to its slowest pace of growth in 10 quarters. China's slowing expansion led to speculation the government may be forced to ease spending and ease policy to maintain growth through 2012. "This morning the markets proved that Europe can still take a back seat (at least for a brief time) in shaping them, while news from China overshadows and takes the lead," Jon Nadler, a senior analyst at Kitco Metals, wrote in a note. "China's slowest pace of growth in over two years (ironically) prompted a rally in commodities as speculators turned bullish on the idea that the country's central bank will now take easing steps in order to get growth back above the fourth quarter's 8.9% level." However, the metal's surge wasn't enough to pull up gold miners. Mining companies were falling after Kinross Gold (KGC) said Tuesday that it expects production to be flat this year while production costs continue to rise as much as 19% on higher labor costs and mine expenses. The Canadian company's shares were down 18% to $10.45. Goldcorp (GG) was falling 1.3% to $44.83. NovaGold Resources (NG) was declining 2.2% to $8.77. New Gold (NGD) was dropping 1.4% to $10.37. Endeavour Silver (EXK) was decreasing 2.6% to $10.04. -- Written by Kaitlyn Kiernan in New York.
>To contact the writer of this article, click here: Kaitlyn Kiernan To follow the writer on Twitter, go to @Kaitlyn_Kiernan.
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