Business News

CCTV Script 13/12/16

This is the script of CNBC's news report for China's CCTV on December 13, Tuesday.

Welcome to CNBC Business Daily, I'm Qian Chen.

Gold has slumped nearly 12 percent in the fourth quarter, suffering its second-worst quarter in 18 years as a host of catalysts pummel the yellow metal.

The most obvious factor is the decline of fear in the marketplace.

Stocks have surged following Donald Trump's surprise victory, and market-based measures of fear like the CBOE volatility index have tumbled.

Such a change in sentiment generally lessens investment interest in gold, often considered a "safe haven" asset.

And indeed, beyond the psychological aspects, gold tends to enjoy an inverse relationship with the stock indexes.

As you can see, Dow has hit record new highs for the 15th time, and surged by 5% in the past 30 days.

While CBOE Vix has fallen more than 10% in the last 30 days.

Meanwhile, as risk appetites have increased, the fixed income market has plummeted, leading to a massive surge in bond yields. Since gold is (at best) a nonyielding asset, higher rates in the bond market make gold a less attractive holding by comparison.

And with the Fed widely expected to raise short-term rate targets on Wednesday, this move doesn't look to be reversing any time soon.

With yields on the upswing, the value of the U.S. dollar has risen dramatically - another classic bearish factor for commodities in general and gold in particular.

CNBC Qian Chen, reporting from Singapore.

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