The price of gold reduced to $1,225 per ounce last Thursday in Europe. This is largely due to the rise of Euro against the dollar, implying that many consider that it’s highly risky to have a strong appetite for assets at the expense of bullion. The State Administration of Foreign Exchange, or SAFE, located in China, stated in their report that market for gold is not as suitable for allocation of assets because of its innate properties, including volatility, being illiquid and being small.
In New York, last Wednesday, gold was priced at $1,230.35. Now it’s price reduced to $1,223.20. Furthermore, future deliveries for the U.S., particularly in August, are now priced at $1,224.70. The Spanish debt auction in particular caused the rise of Euro, because this returned the confidence on how Spain will deal with its huge debt. The policy decisions of the European Central Bank also contributed.
Previously, when the euro was losing considerably, many investors demanded for gold because they wanted to diversify from the currency, according to many analysts. Now that the euro has increased, this buying of gold has been reduced. There is in fact an interim consolidation, and the future is most likely to be that the euro will fall down again, and that means that the gold will rise, but certainly, the situation can go both ways again in the future.
Strikes continue to plague the Honda plants in China. This is already the second time in less than one month that strikes caused the plants to stop production. Tomorrow, two China factories will have to stop their car assembly production. These plants, which are located in Guangzhou in the province of Guangdong, will close because their employees are asking for higher pay.
The Chinese government has now changed its mind about the internet. It now likes what it sees. Last Tuesday, they have called the internet, ‘the crystallization of human wisdom, the great scientific invention of the 20th century, an important indicator of advanced productivity’. This statement was published in a white paper they released entitled China’s Internet Situation. This paper says that the Chinese government acknowledges the importance of the internet in improving the lives of the Chinese people and its benefit to the economy.
Suntech Power Holdings Co Ltd is China’s biggest maker of solar panels. They plan to invest the equivalent of $393 million for a 1 GW production capacity that they will set up in Shanghai. This is because of the rising demand for solar panels in the next three years.
McDonald’s recalled all of its Shrek drinking glasses, after it was discovered to contain cadmium. These glasses were sold to promote the fourth installment of the movie Shrek in the United States.
Workers in China protested, and the companies responded by increasing hefty pay. This is good news for China and the world, because it implies that the country is slowly leaning on towards the benefit of the workers. This is a good indication because it will lead to increase in domestic consumption. Aside from this, it is also one step towards global economic balance and would definitely be for the better.
China’s manufacturing increased slower than expected in May, as the reports indicated property sales drops in three major Chinese cities. This resulted in stock declines all over Asia as they speculate that China’s economy may slow.
A trend is brewing in Chinese society. Workers are now demanding higher wages at a Honda plant. China’s economy is relentlessly moving in favor of their workers. The economy’s growth has favored business owners but it is slowly moving in a new direction. Labor shortages are seen to increase and the law of supply and demand will adjust in the worker’s favor.