The gold price fell during Asian trading hours on Wednesday as the yellow metal lost its safe haven appeal after China announced stimulus measures to boost its economy.
Spot gold was last at $1,137.2/1,137.5 per ounce, down $5.9 on Tuesday’s close. Trading ranged from $1,134.8-1,146.7 so far.
The People’s Bank of China (PBoC) said on Tuesday after markets closed that it will cut its benchmark lending rate by 25 basis points to 4.6 percent – the fifth reduction since November – with effect from Wednesday. It also lowered the one-year deposit rate by 25 basis points to 1.75 percent and reduced reserve requirements by 50 basis points to 18 percent for most big banks.
Gold prices had fallen to a low overnight as Western stock markets rallied initially after the announcement and on upbeat US data.
“Pressure will mount on the metal if equities and other assets form a recovery following the brutal sell-off last week and on Monday,” said MKS Group on Wednesday morning.
Asian stock markets, however, got off to a rocky start on Wednesday following a late-day sell off in the US stock market. The Shanghai composite index is so far down 3.77 percent to 2,853.117 on Wednesday morning.
In data, core durable goods order, durable goods orders and crude oil inventories from the US are due later on Wednesday.
In other precious metals, silver was at $14.58/14.63 per ounce, up $0.07. Platinum was at $974/979, down $0.5, while palladium was flat at $533/538 so far on Wednesday morning.
On the Shanghai Futures Exchange, gold for December delivery was unchanged at 236.7 yuan per gram, while December silver was flat at 3,358 yuan per kilogram recently on Wednesday morning.
The post Gold down after China stimulus announcement appeared first on The Bullion Desk.
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