Gold Falls To 2-Week Low, Chinese Demand Worries Grow

Gold fell to its lowest in nearly two weeks on Thursday as investors waited for U.S. data for clues on the outlook for Federal Reserve stimulus, while platinum eased from a 2-1/2 month high ahead of planned strikes at South African mines.

Gold’s decline comes despite weakness in equities as some traders were worried that demand in China – the world’s biggest buyer of bullion – would be hurt by a slowing economy. Gold normally moves in the opposite direction from equity markets.

Data on Thursday showed activity in China’s factory sector contracted in January for the first time in six months as new orders declined, confirming that a mild slowdown at the end of 2013 has continued into this year.

“Those numbers are making some people fear that China may not buy as much gold as last year,” said a trader in Hong Kong.”If the economy is slowing, then luxury and discretionary spending might be cut down.”

Spot gold fell to $1,231.36 – its lowest since Jan.10, before recouping losses to trade steady by 0722 GMT.

Source : cnbc