The focus of commodity markets next week is likely to be the raft of data out of China, culminating in Q3 GDP and September industrial output and investment spending on Friday. The September data, in particular, will be scrutinised for further indications of an economic slowdown and its negative implications for commodity demand. We think it is probably too soon to see any pick-up in either series as a result of the looser policy stance. That being said, the September trade data, released today, showed resilient commodity import demand.
Investors will also be keeping a close eye on the US equity market, which had a wobble this week and prompted a jump in the price of gold but exacerbated the decline in the oil price. We think gold could ease back again if, as seems likely, equity prices stabilise next week. However, our longer-term view is that a sharp fall in the US equity market in 2019 will be a factor prompting safe-haven demand for gold.
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