Gold closes higher and remains at historically high levels, with Chinese demand

Gold closed higher this Monday, 29th, remaining at historically high levels with support from Chinese demand and central banks. On Comex, the metals division of the New York Mercantile Exchange (Nymex), with delivery scheduled for June, it closed up 0.44%, at US$ 2,357.70 per troy ounce.

The metal had also appreciated in the previous session, but fell 3% in the last week. City Index analyst, Fawad Razaqzada does not rule out the possibility of a more significant correction – given that this week will feature a decision from the Federal Reserve (Fed, the North American central bank) and other strong macroeconomic drivers -, but emphasizes that the metal remains “fundamentally supported”.

He also theorizes that investors who missed out on the metal’s most recent rally should take advantage of opportunities to buy on the dip. “This could be another factor supporting prices,” the economist wrote.

Razaqzada also mentions that, with inflationary pressures eroding the purchasing power of traditional currencies, assets such as gold and silver gained value. Another point he highlights as a possible “bullish signal” (that is, one that points to an upward movement) is that gold has shown itself to be resilient against the strength of Treasuries and interest rates – “factors that have kept it under pressure in the past” .

Heraeus Precious Metals also highlighted the gap between Treasuries and the dollar as drivers of the gold market. The consultancy stated that, this Monday, strong physical demand from Chinese investors and the People’s Bank of China (PBoC) is contributing to keeping the metal valued. “The power to change the price of gold is moving from West to East,” he said in a report this Monday. “China is the biggest market for retail gold demand, and the property sector’s struggles from a slowing Chinese stock market may have pushed more investors into gold.”

Third-party advertising. It is not an offer or recommendation from Investing.com. Read our guidelines here or
remove ads
.