Gold Drop's 1% on Chinese Rate Rise

The spot gold price dropped close to 1% this morning on the news that China had raised its interest rate over the holiday weekend.

This is the Chinese central banks second interest rate rise in as many months, the Chinese are trying to curb the strong inflationary pressure that there economy is under at present. Spot gold fell to a 7 day low before bouncing back a little to $1,374 p/oz, other metal price also have been adversely effected by the news out of China.

China is a key market currently for commodities and all economic data coming out of the country has an immediate impact on commodity market prices. However with this sort term dip I dont think it wil be long into the new year before we see the spot gold price jump back over the $1,400 p/oz mark.

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