Tuesday, January 31, 2023
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Gold clings near $1,800 on soft dollar as China relaxes COVID curbs

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By Arundhati Sarkar
(Reuters) – Gold pulled back slightly from a five-month high on Monday as the U.S. dollar recouped some losses, although the metal still held near the key $1,800 level, buoyed by news of top bullion consumer China relaxing its stringent COVID-19 restrictions.

Spot gold ticked 0.2% lower to $1,794.53 per ounce by 1206 GMT, after touching its highest since July 5 at $1,809.91 earlier in the day.

U.S. gold futures edged down 0.1% to $1,807.30.

The dollar earlier hit a more than five-month low, but has since pared some of those losses. A weaker dollar makes gold cheaper for overseas buyers. [USD/]

“China’s easing of its zero COVID stance is enabling gold prices to hang on to recent gains,” said Han Tan, chief market analyst at Exinity, adding positive reinforcements are allowing bullion to stay within touching distance of the psychological $,1800 mark.

China may announce 10 new COVID-19 easing measures as early as Wednesday, sources told Reuters.

This also means gold demand will increase in the region, said Matt Simpson, senior market analyst from StoneX. [GOL/AS]

Gold traders were still focused on the U.S. Federal Reserve’s rate-hike path, with a recent softening of its aggressive stance giving a fillip to non-yielding bullion.

“The near-term path of gold will be strongly influenced by the upcoming US CPI data. We still look for further rate hikes weighing on gold over the coming weeks,” UBS analyst Giovanni Staunovo said.

November CPI data will be released on Dec. 13.

Silver fell 0.6% to $22.99 per ounce.

Silver, which has been unable to capitalize on strong fundamentals including demand from the electric vehicle and solar industries due to rate hikes and the dollar’s climb, could see a sustained rally now that these bearish factors fade, Kinesis Money said in a note.

Platinum rose 1.2% to $1,026.38 while palladium also gained 1.2% to $1,921.84.

(Reporting by Arundhati Sarkar, Ashitha Shivaprasad in Bengaluru, additional reporting by Arpan Varghese; Editing by Krishna Chandra Eluri and Sherry Jacob-Phillips)

Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.

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