Gold climbed to its highest level since July as the dollar slipped, with traders buoyant as China removes some Covid Zero restrictions.
Chinese authorities have accelerated a shift toward reopening the world’s second-largest economy, with Shanghai and Hangzhou easing some restrictions after protests against the nation’s stringent policies.
Bullion had been hurt by the Federal Reserve’s aggressive rate hikes this year. Recent indications that the central bank is becoming less hawkish have boosted the metal, pushing it past $1,800 an ounce last week.
While the precious metal slipped below that level after Friday’s US jobs report, bets on China’s reopening drove the greenback lower and further propped up prices on Monday. Gold tends to have a negative correlation with the dollar and rates as it does not bear interest and is priced in the US currency.
Strong jobs data and wage pressures “helped knock gold lower,” but the metal “moved higher almost immediately and has a ‘buy the dips’ feel at the moment,” said Nicholas Frappell, global head of institutional markets at ABC Refinery in Sydney.
Spot gold climbed 0.6% to $1 808.64 an ounce as of 12:35 p.m. in Singapore, and is trading at its highest level since early July. The Bloomberg Dollar Spot Index declined by 0.4% to its lowest level since June. Palladium, silver and platinum climbed.
© 2022 Bloomberg
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