Precious: Gold jumps on dollar pullback, China re-opening optimism

China Reinsurance (Group)

27/12/2022 15:29

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      Dollar index  .DXY  down 0.2%
    

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      Benchmark 10-year yields reach highest since Nov. 21
    

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      China to drop quarantine rule for inbound travellers 
    

  
 (Recasts, adds comments, updates prices)
    By Seher Dareen
       Dec 27 (Reuters) - Gold prices rose on Tuesday as
optimism surrounding top consumer China's decisions to further
ease COVID-19 restrictions weighed on the dollar, while
resilient U.S. yields cast a shadow over non-yielding bullion's
advance.
    Spot gold  XAU=  rose nearly 1% to $1,814.69 per ounce by
10:15 a.m. ET (1515 GMT). U.S. gold futures  GCcv1  were up 1%
as well at $1,823.00.
    While the expectation for U.S. Federal Reserve rate hikes
coming to an end has been a supportive environment for gold, if
benchmark U.S. Treasury yields "do remain a little lofty, that
certainly could be a slight barrier to gold's rise," said David
Meger, director of metals trading at High Ridge Futures.
    The dollar index  .DXY  edged lower, and benchmark 10-year
yields held close to their highest in over a month.  USD/  US/ 
    Gold has gained nearly $200 after falling to a more than
two-year low in late September, as expectations about slower
interest rate hikes from the Fed dimmed the dollar's allure and
lowered the opportunity cost of holding bullion, which pays no
interest.
    Focus today seems to be on top gold consumer China relaxing
quarantine rules, in a major step towards easing curbs on its
borders, which have been largely shut since 2020.
    "The gold futures bulls have the overall near-term technical
advantage. Prices are in a seven-week-old uptrend on the daily
bar chart," with the first resistance at $1,825 an ounce, said
Jim Wyckoff, senior analyst at Kitco Metals, in a note. 
    In other metals, spot silver  XAG=  rose 1.5% to $24.07 per
ounce while platinum  XPT=  dropped 1.6% to $1,012.25.
    Palladium  XPD=  jumped 2.9% to $1,814.13, earlier in the
session hitting its highest in over a week at $1,817.68, on news
about China opening up. 
    "We continue to see palladium as the stronger of the two
metals (platinum and palladium) almost specifically due to
supply constraints," Meger highlighted. 
 (Reporting by Seher Dareen in Bengaluru, Editing by Louise
Heavens)
 ((Seher.Dareen@thomsonreuters.com; If within U.S. +1 646 223
8780;))