January 24, 2022

Gold prices at a low

Gold prices tumbled on Monday after Swiss voters overwhelmingly rejected proposals to boost gold reserves in a referendum, joining a broad rout in commodities that sent copper and oil prices to four- and five-year lows.

The slide in the oil and commodity prices is hurting many assets tied to the resource sector – from Australian mining shares to the Malaysian ringgit.

MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS fell 1.9 percent, hitting six-week lows.

U.S. stock futures ESc1 also slipped 0.4 percent, though some market players think the fall could stem partly from disappointing sales at the start of the U.S. holiday shopping season last Friday.

European stocks are expected to fall, with Germany’s DAX and France’s CAC40 seen shedding 0.6 percent.

China’s economy

Growth in China’s manufacturing sector slowed in November, suggesting the world’s second-largest economy is still losing momentum and adding pressure on authorities to ramp up stimulus measures after unexpectedly cutting interest rates last month.

After saying for months that China does not need any big economic stimulus, the People’s Bank of China (PBOC) surprised financial markets by lowering rates on Nov. 21 to shore up growth. Analysts see more moves in coming months if the economy continues to stumble.

“The PBOC’s rate cut appears to have failed to improve sentiment, and we see little improvement in activity indicators in November,” ANZ said in a research note.

“In order to maintain growth for the whole year at around 7.5 percent the official target, we believe that Chinese authorities will intensify easing efforts in December to accelerate growth momentum.”

Denisha Sahadevan


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