Gold price rises to six-month high on China reopening optimism
Gold prices rose on Tuesday as optimism surrounding China’s decisions to further ease covid-19 restrictions weighed on the US dollar, while resilient yields cast a shadow over the precious metal’s advance.
Spot gold was up 1.3% to $1,821.37 per ounce by 11:50 a.m. ET, easing off a six-month high of $1,832.35 reached earlier in the day. US gold futures gained 1.4% to trade at $1,828.90 per ounce.Meanwhile, the US dollar index edged lower, and benchmark 10-year yields held close to their highest in over a month.
Bullion has gained nearly $200 after falling to a more than two-year low in late September, as expectations about slower interest rate hikes from the Fed dimmed the dollar’s allure and reduced the opportunity cost of holding gold.
“The gold futures bulls have the overall near-term technical advantage. Prices are in a seven-week-old uptrend on the daily bar chart,” with the first resistance at $1,825 an ounce, said Jim Wyckoff, senior analyst at Kitco Metals, in a Reuters note.
“While the expectation for US Federal Reserve rate hikes coming to an end has been a supportive environment for gold, if benchmark US Treasury yields do remain a little lofty, that certainly could be a slight barrier to gold’s rise,” warned David Meger, director of metals trading at High Ridge Futures.
The focus now seems to be on top gold consumer China relaxing its quarantine rules, in a major step towards easing curbs on its borders, which have been largely shut since 2020.
