Gold rises as China data boosts yuan against dollar

News
Gold gained on Friday as the dollar eased against the yuan after promising China economic data boosted recovery hopes in the world’s top bullion consumer, although the possibility of further U.S. interest rate hikes kept investors on edge.

Spot gold rose 0.4% to $1,917.59 per ounce by 0701 GMT. Bullion dropped to near $1,900 level, its lowest since Aug. 23, on Thursday. U.S. gold futures gained 0.3% to $1,938.90.

The yuan hit two-week highs against the U.S. dollar after data showed China factory output and retail sales in August beat forecasts, making greenback-priced bullion more attractive for Chinese buyers.

Focus now shifts to Federal Reserve’s Sept. 19-20 policy meeting.

“The outlook for rates to be kept high for longer has been keeping non-yielding gold prices under pressure,” said Yeap Jun Rong, a market strategist at IG.

“Given the still-resilient economic conditions in the U.S., it does not seem to warrant the need for rate cuts anytime soon, with the timeline for cuts constantly pushed back into mid next year.”
Data on Thursday showed U.S. producer prices increased by the most in more than a year last month while retail sales also beat expectations, boosted by a surge in gasoline prices. This comes after U.S. consumer prices in August increased by the most in 14 months, keeping bets alive for further U.S. rate hikes after a likely pause next week.

“Numerous Fed officials have made it clear the task of combating inflation is not yet over. We, therefore, do not view monetary policy as supportive of gold until well into 2024,” HSBC said in a note.

“Institutional investors have yet to commit to gold, as net long positions on the CME and ETF holdings indicate.” [CFTC/] [GOL/ETF]

Positive Chinese data also supported other precious metals, setting them on track for weekly gains. Spot silver climbed 2% to $23.08 per ounce, platinum gained 0.5% to $910.91 and palladium steadied at $1,250.40.

(Reporting by Swati Verma in Bengaluru; Editing by Sherry Jacob-Phillips)

(What’s moving Sensex and Nifty Track latest market news, stock tips and expert advice on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds.)

Download The Economic Times News App to get Daily Market Updates & Live Business News.

Top Trending Stocks: Sensex Today Live, SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

Articles You May Like

US Dollar goes nowhere while G20 is set to meet on Ukraine this week
Australian Consumer Confidence, weekly survey, comes in at 86.8 (prior 86.7)
EUR/GBP Price Forecast: Extends gains past the 50-day SMA and 0.8300
GBPUSD Technical Analysis – The US Dollar rally might have run out of steam
ICYMI – Chinese vessel spotted where Baltic Sea cables were severed

Leave a Reply

Your email address will not be published. Required fields are marked *