Gold prices rebound in Asia, but copper down on China trade, Greece eyed

Investing.com - Gold prices staged a mild rebound on Monday in early Asia, but copper fell on disappointing China trade data with investors focused on Greece as well.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery rose 0.36% to $1,238.50 a troy ounce.

Also on the Comex, silver futures for March delivery rose 0.40% to settle at $16.763 a troy ounce.

Elsewhere in metals trading, copper for March delivery dropped 0.34% to $2.582 a pound.

Japan reports the adjusted current account for January with a forecast for a surplus of 950 billion yen. Later, Reserve Bank of Australia Governor Glenn Stevens speaks.

Greece's Prime Minister, Alexis Tsipras reiterated Sunday that he will not ask for an extension of the current EU funding program ending Feb. 28, and will seek a new deal with the creditors as his government is not recognizing past agreements.

At the weekend, China reported that exports fell 3.2% in January and imports slumped 19.7% in yuan terms with the overall trade balance at a positive $60.3 billion.

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

In dollar terms, exports slumped 3.3% from a year earlier last month, missing expectations for a 6.3% increase, while imports tumbled 19.9%, much worse than forecasts for a decline of 3.0%.

The data is expected to put more downwards pressure on the yuan exchange rate. But the government has stopped short of engineering a sharp depreciation of the exchange rate, despite similar moves by other global central banks.

Last week, gold tumbled sharply on Friday, as robust U.S. non-farm payrolls fuelled optimism over the strength of the economy and boosted expectations that the Federal Reserve will begin to raise rates sooner and faster than previously thought.

The Labor Department reported that the U.S. economy added 257,000 jobs in January, far more than the 234,000 forecast by economists. December’s figure was revised to 329,000 from a previously reported 252,000.

While the unemployment rate ticked up to 5.7% last month from December’s 5.6%, hourly earnings and the participation rate both saw increases in January.

The upbeat data added to the view that the strengthening economic recovery may prompt the Fed to start raising rates from near zero levels as early as June.

Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.

Meanwhile, the euro remained under pressure as concerns over Greek debt negotiations continued to weigh on market sentiment.

Standard and Poor’s downgraded Greece to B- from B late Friday, one notch above default, and kept the outlook at "negative", indicating that further ratings cuts are possible.

In the week ahead investors will be awaiting Thursday's U.S. data on retail sales and jobless claims and Friday’s report on consumer sentiment for further indications on the strength of the economic recovery.