Gold was firm overnight after gaining over $27 in New York trading on Thursday, and is ignoring a slightly stronger dollar this morning. The dollar index has made it back above 81 in volatile trading.
More decent economic news from China helped global stocks coping with thin volumes. Chinese factory output for July was reported to have risen 9.7% year over year, while retail sales climbed 13.2%. The Chinese consumer price index was reported up 2.7, giving the government some breathing room as it fights economic corruption and attempts to purge outdated and excess capacity from its industrial sector. The data helped Chinese stocks post a strong gain for the week.
The news helped the Nikkei close barely in the green for the day, up 0.1%, but the Japanese index was down sharply for the week, losing 5.9%. Hong Kong stocks also rose on Friday, but closed the week at a loss.
In Europe, Germany posted a .75% gain in second quarter GDP, helping Euro stocks.
U.S. stocks opened lower, as traders really don’t see anything that jumps out at them as a buy or sell. While recent economic data from China helps, the markets are more worried about whether the Fed is going to taper their quantitative easing program next month or not.
Commodities, including gold, are in the same boat. The usual thin August volumes, and no major news, means all eyes are on Ben Bernanke. Movement in the dollar is the only real steering current for precious metals at the moment.
Recent outflows from gold ETFs in the West may be having an effect on short-term traders, but most long-term traders now assume that gold is immediately being resmelted into the favorite sizes of Chinese buyers and is being sent to Asia. Today’s retail sales numbers out of China are a supportive development for gold, even as the Indian government struggles against rampant smuggling in its effort to stop gold imports.