Gold price continues to fall as China growth

Gold futures on the COMEX Division of the New York Mercantile Exchange extended losses on Tuesday, as investors tend to hold cash after a disappointing reading on Chinese growth and continued worries about the euro-zone's debt woes. The most active gold contract for December delivery lost 23.8 dollars, or 1.4 percent, to 1,652.8 dollars per ounce. The National Bureau of Statistics (NBS) said Tuesday that China 's GDP expanded 9.1 percent year-on-year in the third quarter, marking the slowest pace since the third quarter of 2009. The growth rate was down from 9.5 percent in the second quarter of this year and 9.7 percent in the first quarter. Market analysts mentioned that gold may have less appeal as a hedge against inflation, as China's third-quarter economic performance, which was weaker-than-expected, was seen as somewhat uninflationary. Meanwhile, the precious metal was also hammered as signs of weakening economic activity in China may indicates smaller demand for physical gold. And the newly-gained strength in U.S. dollar also weighed on the bullion. A trader mentioned that gold suffered pressure early after Moody's Investors Service warned that its outlook on France's debt rating was under threat and a reading on Germany's economic sentiment hit its lowest levels since 2008. "Traders and investors alike are growing more doubtful that the European Union can solve its debt crisis on its own. The whole world will be watching the Brussels summit this week as the Euro region's finance ministers will try and agree on a resolution to the region's constant and growing fragility", said Mike Daly, a gold specialist with PFGbest here in Chicago. Silver for December delivery added 1 cent, or 0.03 percent, to 31.831 dollars per ounce. Platinum for January delivery trimmed 11.1 dollars, or 0.7 percent, to 1,540.7 dollars per ounce.