Gold prices edged higher on Wednesday as strong Chinese economic data drove bets for better physical demand from the world’s top consumer, though the risk of elevated US interest rates capped bullion’s gains.
Spot gold rose 0.8% to $1,841.83 per ounce by 11:00 a.m. ET, its highest in a week. US gold futures were up 0.5% to $1,847.00 per ounce in New York.
[Click here for an interactive chart of gold prices]
With strong data out of China and some countries looking to continue with rate hikes, the dollar was weakening against other currencies, providing some support to the gold market, said David Meger, director of metals trading at High Ridge Futures, in a Reuters note.
The US dollar hit a one-week low earlier in the day after China’s yuan gained as the country’s manufacturing activity expanded at its fastest pace since April 2012, making bullion more affordable for foreign buyers.
The gains come after bullion posted its worst month since June 2021 in February after strong US data pointed to a resilient economy, suggesting that the Federal Reserve could deliver more rate hikes to curb inflation.
It is expected that US employment and consumer prices reports in the next two weeks would help investors to gauge the path of interest rates.
(With files from Reuters)