Gold still unable to recoup recent losses, palladium defies disappointing China's car sales

Gold is still proving unable to recoup its losses of recent weeks, and is trading at around $1,110 per troy ounce as the week draws to a close. It is therefore facing its third consecutive weekly fall. 

After gaining 2.3% yesterday, palladium is again nearing the $600 per troy ounce mark despite news that should really be weighing on its price, as the auto market in China is still showing clear signs of weakness. 

According to data from the China Association of Automobile Manufacturers (CAAM), "only" 1.42 million cars were sold in August, which is 3.4% down on the year-on-year figure. Year-on-year, this was already the third monthly decline in a row. 

12.78 million cars were sold in the first eight months of the year, which still equates to an increase of 2.6% as compared with the same period last year. Unless sales recover considerably in the remainder of the year, 19.17 million cars in total will be sold this year - the first annual decline in over a decade. 

The CAAM deputy secretary general has thus called on the government to initiate various stimulus measures to revive car sales. The last time the government offered incentives to buy cars in China was during the global economic and financial crisis in 2009. 

Car sales in the US are performing better than in China, with the result that August was already the second consecutive month to see more cars sold there than in China, says Commerzbank.