Gold Continues Gain as China Demand Returns After Holiday
Gold continued to rise as the world’s biggest bullion buyer returned from a holiday and boosted demand.
The precious metal rose as much as 1.6% to above $3,387 an ounce, jumping as markets in China opened after a five-day hiatus. Gold also found support from a weaker dollar, which fell against Asian currencies on Monday, especially the Taiwan dollar.
Trading in gold futures on the Shanghai Futures Exchange has hit record volumes in recent weeks, even as the exchange tightened margin requirements to try to cool speculative fervor.
Bullion’s status as a safe haven has been reinforced by market turmoil sparked by U.S. President Donald Trump’s aggressive trade policies. His moves to impose, then unwind, massive tariffs on imports have undermined the dollar’s traditional role as a safe haven and caused investors to increase allocations away from U.S. assets. The metal has surged more than a quarter this year, hitting a record above $3,500 an ounce in April, before losing some ground in recent weeks. The rally was driven by safe-haven buying as trade tensions unnerve investors, as well as by speculative demand in China and central bank buying.
Spot gold rose 1.5% to $3,382.85 an ounce as of 11:08 a.m. in London. The Bloomberg Dollar Spot Index rose 0.1%. Silver, palladium and platinum rose.
Investors across the board are looking ahead to the Federal Reserve’s midweek interest rate decision. Policy makers are widely expected to hold rates steady when they conclude their meeting on Wednesday, even as Trump ramps up pressure on Chairman Jerome Powell to ease. Lower borrowing costs tend to benefit bullion because it doesn’t pay interest.
Source: Bloomberg
