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Straits Times 3,213.65 +5.99 +0.19%
Hang Seng 29,071.56 -249.41 -0.85%
Dow Jones 25,962.51 +216.84 +0.84%
Shanghai Composite 3,101.46 +10.81 +0.35%
Sell Offs In Gold, China’s Slowing Growth, Markets Remain Wary
By: Louis Kent Lee
Articles (199) Profile

What goes up must come down. Since March, we’ve been seeing gold prices taking a hit, this was given yet another kick on 10 April, when a European Commission report showed that Cyprus might be forced to sell bullion reserves to raise money for its bailout. Panic selling ensued and on Monday, 15 April, gold plunged more than 9 percent, the biggest one day drop in 30 years to US$1,336.04 an ounce.

In China, data revealed that its economic growth has slowed to 7.7 percent for the first quarter, which was below the expectations of many and fuelled concerns about a weak outlook possibility. This figure was below the median of 8 percent forecast and was also lower than the 7.9 percent figure in the last quarter. Appreciation of the Chinese Yuan and aggressive monetary easing policies abroad have impacted China’s exports.

Chinese president Xi Jinping expressed that China may not be able to sustain economic growth of ultra-high speed as seen in the past, but a relatively high speed of economic growth is not impossible.

Elsewhere in the world, the Boston Marathon explosion, coupled with a slew of disappointing economic data in the US saw the Dow Jones Industrial Average taking heat since the start of the week on 15 April.

Shifting the spotlight back to the lion city, Singapore’s private homes market saw a strong rebound in March as new projects were launched by developers. This was despite the cooling measures introduced by the government in January.

The Singapore Exchange was also seen reporting its biggest quarterly profit since 2008 on the back of higher trading volumes in derivatives and securities. Net profit saw an increase of some 26 percent.

Coupling macro uncertainty with pressure from Keppel Corp’s posted 1Q13 loss, the Straits Times Index (STI) was flattish for the most of the trading day on 19 April.

The STI closed at 3,294.05 on 19 April.

Louis is a qualified accountant with the ACCA, and is the Research Editor at Shares Investment magazine.

Please click here for more information about this author.


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