China’s Economy Grows at the weakest rate since the global financial crisis in 2008

China's economy grew 6.9% in the third quarter of 2015, the weakest rate since the global financial crisis. The year-on-year growth rate is also below the government's 7% target.

Imports saw a sharp fall for the past month while inflation eased by more than expected, adding to fears of a rapid slowdown in the world's second largest economy. This slowdown comes despite repeated interest rate cuts and other stimulus measures introduced by Beijing.

A “hard landing” for the Chinese economy will likely lead the world into a recession in the next year, Citi’s global economics team has warned.

So what does all of this mean for precious metals, and in particular, gold and silver.
Well if the Chinese economy falters then demand for industrial metals and commodities will decline further and this will most certainly have a negative impact on the price of silver. From a supply point of view this will mean, initially a surplus and then a deficit as other metals are not mined - with 70% of silver’s mines supply being dependent on such mining. Its impact is as we have said before, negative short-term and positive in the very long term for silver. As far as gold is concerned, much depends on China’s ability to continue to afford its current rate of gold purchases. Should this falter then again this will prove negative for gold prices, however, if the world does enter into a recession, then quite possibly interest rates will not rise and this could be positive for gold. Overall we still see downward pressure on the metals unless of course that elusive ‘black swan’ swims by.