Gold turns lower after China shows trade slowdown

In the Lead: “400. This is NOT Sparta!”

This morning, commodities overall appeared less than pleased with reports that China has somehow amassed a large enough pile of copper to make for a potentially sizeable slide in the amounts of orange metal it might be demanding in the near-to-medium term. We are talking here about year-end 2010(!) inventories, to boot. Nearly 2 million metric tonnes of the stuff were seen clogging various bonded warehouses at that time and nobody has offered estimates on what such stockpiles might have swollen to as we speak.

Black gold’s traders were less than pleased with yesterday’s IEA demand forecasts and Slovak EFSF vote. The US Labor Department reported that initial jobless claims dipped to the 404,000 mark in the latest tracked period. The dollar traded higher and stock futures declined in the wake of the barely-changed-from-last-week data and gold prices header somewhat lower still.

Silver gave back 57 cents on the open and traded at one penny above the $32 mark per ounce. Platinum and palladium both sold off as well, with the former shedding $11 to drop to the $1,534 bid-side level while the latter eased $7 to commence trading at $602 the ounce. No significant help to the noble metals’ complex was offered by news that China’s passenger-car sales activity surged for a fourth straight month in September, rising nearly 9%.

More than 1.3 million vehicles rolled out of Chinese showrooms and into eager buyers’ garages last month. The sales increase percentage was the highest for the aforementioned period. Car fever continues to grip the Chinese consumer but we will have to watch the levels of economic activity (as reflected in the above-mentioned import/export data) and remain alert to potential trend changes, should they become manifest in this important niche.

Meanwhile, guess who’s coming to Capitol Hill with tax hikes plans on the rich? No, it’s not “Occupy [insert your favorite locale here].” It’s…Warren Buffett. President Obama’s newest BFF is bringing his fight to raise the numbers that the well-to-do are paying Uncle Sam to the recently-created deficit-reduction “Supercommittee.” Uncle Warren – and he is not even remotely running for President (!) – offered to open up his personal tax return and challenged the well-heeled of America to do the same in an effort to get the tax dialogue and reforms underway.

The so-called “Buffett Rule” may be far from being a reality, but the publication (even anonymously) of the returns being filed by the 400 wealthiest Americans would be a “big step in informing legislators and the public in what needs to be done.” Four hundred Americans have more wealth than half of all other US citizens combined, says activist documentary filmmaker Michael Moore. All of America household wealth amounts to $54.9 trillion. You do the math on the rich and the ratio. Suffice it to say, it will soon be demonstration placard material for the OWS throngs.

Until tomorrow,

Jon Nadler is a Senior Metals Analyst at Kitco Metals Inc. North America

Websites: www.kitco.com and www.kitco.cn

About the Author
Jon Nadler

Jon Nadler is senior metals analyst with Kitco Metals Inc. in Montreal.

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