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China Continues to Hurt Commodities, Benefits Precious Metals

January 11, 2016 at 10:53 by Vladimir Vyun

China continues to weigh on the commodity market at the start of the current trading week, the same as it has happened the week before. The Shanghai Stock Exchange Composite Index crashed more than 5 percent today, despite attempts of Chinese policy makers to halt the decline. Economic data released over the weekend was mixed. While consumer prices retained their growth, producer prices stayed in deflation. This suggests that the Asian nation is going to produce less (as it could be expected as the country is trying to shift from a production-driven economy to a service-driven one), reducing its consumption of raw materials.

As a result of the worrisome news, Large Bounce House crude oil extended its drop while copper fell below the $2 level, sinking to a multi-year low. Meanwhile, gold and silver avoided losses, profiting from their role as a safe haven.

February contract for gold advanced 0.16 percent to $1,099.7 per troy ounce as of 10:45 GMT on COMEX today. March silver was up 0.37 percent to $13.97 per ounce. Meanwhile, copper sank 1.93 percent to $1.983 per pound. Futures for delivery of WTI crude oil in February tumbled 1.45 percent to $32.68 per barrel on NYMEX. Brent crude subtracted 1.4 percent to trade at $33.08 per barrel on ICE.

If you have any questions and comments on the commodities today, use the form below to reply.

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