Precious Metals Rebound- Will The Rally Have Legs?
Yesterday was a huge day for the precious metals complex. Not only were gold and silver higher by 2% and 5% respectively, but platinum, palladium, and copper all shot higher as well.
Without a doubt, it was the best day for metals in months.
What sent them surging?
China’s National Bureau of Statistics released important trade data recently. Year-over-year July import growth jumped to 10.9%. That’s much better than the 4% expected by analysts and a huge rebound from last month’s minus 0.7% reading.
What’s more, Chinese exports jumped 5.1% in July. That’s remarkably better than the negative 3.1% reading from June and higher than the consensus estimate of 3.7%.
What’s that mean in plain English?
The swift rebound in import/export data means China may be embarking on another growth spurt. At the very least, it signals the country’s growth woes aren’t as bad as many economists believe.
Now remember, China is still growing at around 7.5%. So it’s not like the country is on the verge of a recession. However, 7% growth is notably weaker than the 10% growth seen in years past.
Is this data a sign of good things to come for precious metals?
First of all, it’s too early to say if China’s enormous trade revival is sustainable. But even if we see numbers roughly in the same ballpark over the next few months, it will be a huge win for commodity bulls.
As you may know, China is the largest consumer of hard assets on the planet. And if their economy is accelerating, they’ll need more raw materials to support that looming growth.
Folks, this is another sign that precious/industrial metals may have seen their lows for the year.
Stay tuned to Commodity Trading Research for continued coverage of the precious metals markets!
Until Next Time,
Justin Bennett
Category: Commodities
