Conjecture about the nation hosting the globe's second largest economic system needing to address hiccups with growth and development by implementing stimulus techniques drove up the price of gold futures on Friday, according to Bloomberg.
Troubles in China, which have been sporadic throughout the year, helped the yellowish metal advance for the first time in four trade sessions as bullion drove toward the psychological barrier of $1,600 per troy ounce.
One day after scraping their lowest value of the month after June minutes from the U.S. Federal Reserve meeting indicated no monetary easing plan is in the immediate offing, gold futures were climbing higher as a result of news indicating growth in China slowed during the second quarter of this year.
"Chinese data was a bit worse than expected," senior vice president Afshin Nabavi with bullion refiner MKS Finance in Geneva told Bloomberg. "Everything is pointing towards more easing. That obviously should be good for gold."
At 4:13 p.m. on Friday, gold futures advanced 1.44 percent, a $22.60 lift to $1,587.90 per troy ounce.
The Asian nation's economy revealed a slackened pace of development and growth for a sixth quarter to the slowest since the worldwide economic crunch began in 2008. Wen Jiabao was under mounting pressure to implement strategies and methods of prompting stronger returns for the second half of the year.
China's GDP not as bad as feared
Though the economy of China marked a sixth successive quarter of losses, some economists were expecting returns worse than those delivered.
The Asian nation is not alone in its economic slump as indications are mounting in the U.S. and Europe, where the voracious sovereign debt crisis continues its damaging tendencies.
Consequently, on the final trading day of the week, the value of the yellowish metal surmounted weekly losses and achieved a weekly gain. Gold benefited from speculation indicating Chinese economic data is likely to spur the central bank of China to act.
"It does indicate that the People's Bank of China has to promote more liquidity via further rate cuts or potential fiscal programs that make sure growth does not fall below these
levels," chief investment strategist Mark Luschini with broker-dealer Janney Montgomery Scott told Reuters.
The second quarter in China saw its gross domestic product check in at 7.6 percent for the second quarter as compared to the same period last year. The figure did not meet the 8 percent rate that on prior occasions prompted policy makers to respond more loudly.
The boost in value that gold achieved on Friday helped push the yellowish metal toward weekly gains of 0.8 percent, according to MarketWatch.
The precious metal once again is on track to push past the milestone price of $1,600 per troy ounce, The International Business Times reports.
Precious metals strategist Edel Tully with UBS penned a client note stating the up-and-down nature of gold as of late is proving to be a "frustration" that is growing stronger.
She noted the range in which the yellowish metal is hovering, noting it is likely to stay in that region.
"Taking a step back from near-term price action, the market is actually continuing to consolidate in the area between $1,550 and $1,650, with the trading range seemingly getting narrower within that space as we delve deeper into the Northern Hemisphere summer months," the strategist wrote, also pointing to the Federal Open Market Committee meeting from last month. "But gold's inability to convincingly break and hold above near-term resistance at $1,600 combined with the disappointing FOMC minutes this week has now brought the market even closer to the lower end of the $100 trading range."
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