| China has been spooking the financial markets, first with its currency devaluation and now with easing the interest rates. Such unexpected moves may have a substantial impact on the prices of commodities and precious metals. As China has cut its interest rates by 25 basis point, money may flow out of the country and likely find its place in the United States.
Such flow into the United States will provide strength to the dollar, pushing the dollar-denominated gold and other precious metals lower. Lower commodity prices could discourage some investors from investing in precious metals. China’s purchasing power in commodities is a major determinant of its prices. Lower demand may further dim gold’s outlook...............................................Full Article: Source
|