Commodites Hit as China Flounders

Published: 24 August, 2015 11:39

A Golden Exodus?

The focus of online commodity trading news has centred around the events in China over the past few days. With the Shanghai Composite Index falling no less than 8.5% before slightly rebounding, investors in precious metals such as gold have been selling off some of their holdings in order to recuperate losses. As this metal has been performing considerably well over the past month, it only makes sense that such a liquidation occurred. However, some wonder as to whether or not online commodity traders will seek to buy back their holdings with the continued volatility of the markets. While China has announced that it is reducing its interest rates by 0.25%, some experts wonder if this will be sufficient to bolster their weakening economy. Thus, we may very well see a resurgence in gold prices as investors once again look for a traditional safe haven against the open markets.

Oil Plummets

Oil prices have hit their lowest levels since February of 2009. While the per-barrel cost of Brent crude has dropped due to increases in supply, the main factor behind this recent rout is associated with the weak economic data emerging from China. As some feel that a true international market panic may not be far off, further strains in global growth are perceived as quickly becoming a reality. Indeed, oil hit a low of $38.24 dollars a barrel during Monday trading and some wonder how much more black gold will continue to lose in the coming days. So, the recent drops are not as much caused by market fundamentals as they are the result of the Chinese crisis. Depending upon the actions taken and the attitude of the online commodity trading community, oil may continue to lose strength before we finally see some semblance of stability before the autumn.

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