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Gold Hovers Near 4-Month Low as China Data Lift Risk Appetite

Investing.com - Gold prices were little changed near a four-month low on Wednesday, as better-than-expected economic data from China kept global appetite for risk assets healthy and capped demand for havens.

At 7:41 AM ET (11:41 GMT), gold futures for June delivery on the Comex division of the New York Mercantile Exchange inched up 75 cents, or 0.1%, at $1,277.95 a troy ounce, barely above the four-month low of $1,272.20 hit on Tuesday.

China reported 6.4% growth for the first quarter, beating expectations for a slowdown to 6.3%. Other data released overnight also showed larger-than-forecast increases in industrial production and retail sales for March.

Wednesday's dump of upbeat numbers added to other signs - including house prices, exports and credit growth - that suggest the world’s second-largest economy is responding to stimulus measures taken at the start of the year by Beijing.

The data have also lifted bond yields, making the most common "haven" alternative to gold more attractive. The yields on both German and U.S. 10-year debt hit their highest in a week on the news.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, slipped 0.1% to 96.57. A weaker greenback makes the dollar-denominated precious metal more affordable for holders of foreign currencies, all other things being equal.

The dollar came under pressure earlier this week after Charles Evans, president of the Chicago Fed, said he would be “comfortable” with standing pat on interest rates until the fall of 2020. The central bank’s current forecast to hold interest rates steady for the rest of the year puts a lid on the opportunity cost of holding non-yielding bullion.

St. Louis Fed president James Bullard and Philadelphia Fed chief Patrick Harker are scheduled to speak on monetary policy and the economic outlook later on Wednesday.

In other metals trading, silver futures rose 0.2% at $14.947 a troy ounce by 7:47 AM ET (11:47 GMT).

Palladium futures advanced 0.5% to $1,335.60 an ounce, while sister metal platinum traded up 0.7% at $890.05.

In base metals, copper gained 1.0% to $2.960 a pound, and is now less than 0.3% away from what would be its highest level since June last year.

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