Market Sentiment Dips Amid Weakening China Data

9 August, 2023

As at 9am, AEST

Gold Spot Price $AU2947

Silver Spot Price $AU34.95

Platinum Spot Price $AU1393

The global financial landscape witnessed a notable downturn as it reacted to the release of concerning economic data from China. In the month of July, Chinese exports saw a substantial decline of 14.5% when compared to the corresponding period of the previous year. This slump was further compounded by a concurrent 12.4% reduction in Chinese imports compared to the same time frame a year ago.

The reverberations of this data were swift and impactful. The Dow Jones Industrial Average, a key indicator of the health of the U.S. stock market, experienced an immediate drop of 0.5% following the announcement of these figures. Similarly, oil prices experienced an initial slide, albeit they managed to regain some of their lost ground subsequently.

In a bid to counterbalance the downward trajectory of oil prices, Saudi Arabia, one of the world's leading oil producers, has pledged to curtail its daily oil production by a staggering 1 million barrels. Echoing this sentiment, Russia has declared its intentions to slash exports by 300,000 barrels per day until the conclusion of September. This strategic reduction in oil supply is anticipated to generate an environment conducive to higher oil prices, as scarcity becomes a driving factor.

Unsurprisingly, the repercussions of the China data extended to the precious metals sector. Gold, often regarded as a safe-haven asset in times of economic uncertainty, managed to maintain a semblance of stability, finding support from its 200-day moving average (200MDA). On the other hand, Silver faced a more pronounced setback, breaching its 200MDA in response to the news from China.

The intertwining complexities of global markets remind us once again of the intricate web of factors that can influence economic trajectories. While geopolitical events, economic indicators, and supply-demand dynamics can prompt swift shifts, the enduring nature of these market trends remains subject to the whims of data releases and strategic decisions taken by key players in the global economic theatre.

This Friday, we’ll talk to US consumer data around credit, jobless claims and CPI/PPI.

Gold daily, with 200MDA

Silver daily, with 200MDA