Gold futures touched a fresh 8-month high Wednesday as traders bet that China’s decision to drop COVID-19 restrictions on its economy would continue to boost prices of precious and industrial metals.
Price action
-
Gold futures for February delivery
GC00,
+0.24% GCG23,
+0.24%
rose by $5, or 0.3%, to $1,889 per ounce on Comex, according to FactSet data. -
Silver futures expiring in March
SI00,
+0.76% SIH23,
+0.76%
rose by 25 cents, or 1.1%, to $23.91 per ounce. -
Palladium for March
PAH23,
-1.17%
advanced $8.70, or 0.5%, to $1,786 per ounce, while platinum for April
PLJ23,
+1.98%
gained $15.30, or 1.4%, to $1,103 per ounce. -
March Copper
HGH23,
+1.74%
rose by 3 cents to $4.11 per pound.
Market drivers
The reopening of China’s economy after the lifting of Covid related restrictions has helped push demand for industrial and precious metals higher and lifted gold to its highest price since last May.
The rise in gold prices has also been supported by a fall in the U.S. dollar against major currencies since last November as U.S. bond yields have eased.
See: U.S. dollar on the verge of first ‘death cross’ since 2020 as rally unravels
Kitco’s Jim Wyckoff said “ideas of better economic growth in China are supporting metals prices on notions of increased demand” in a note to clients published Wednesday.
Looking ahead, whether or not the U.S. dollar continues to weaken will help to decide whether gold and silver prices have further to climb.
“Gold could be one of the biggest winners and we’d expect strength in commodities off the weaker dollar,” authors at Sevens Report Research said.
The ICE U.S. Dollar Index
DXY,
a gauge of the buck’s strength against its main rivals, rose 0.1%, to 103.35.
This post was originally published on Market Watch
