BULLION prices rallied 1.1% on Tuesday in London from yesterday's low in Dollar gold prices, as China's stock market bounced hard following a ban on short-selling by equity traders, but Western stock markets held flat overall.
Silver bullion recovered half of Monday's 2.6% drop to trade at $14.60 per ounce as commodity prices rallied from last week's slump.
Gold held above $1090 per ounce after new data showed US factory orders expanding 1.8% in June as analysts forecast, but economic optimism slipped to the weakest in 9 months.
Shanghai premiums on gold kilobar contracts – over and above comparable quotes in London, the wholesale benchmark – earlier rose to $3.25 per ounce, higher by one-fifth from the average incentive for new Chinese imports of the last 6 months.
Trading volume in the Shanghai Gold Exchange's international market, however, fell to zero for the second time since early July, when a collapse in liquidity on the SGEI – now with 52 foreign member firms including major bullion banks HSBC, J.P.Morgan and UBS, all able to trade using Yuan held in offshore accounts – coincided with a 30% crash in Shanghai's stock market.