Gold prices jumped to their highest in more than a month on Monday on fund buying driven by stronger-than-expected Chinese import data, firm oil prices and a drop in the U.S. dollar against other currencies.
Platinum, mainly used in auto catalysts, rose to levels not seen since August 2008, while silver tracked gold to reach its highest price in more than a month. With Japanese markets closed volume was thin.
Gold was quoted at $1,154.85 an ounce by 0310 GMT, up $16.95 from New York’s notional close on Friday. It rose as high as $1,157.65 an ounce, its strongest level since December 8 — still below a lifetime high of $1,226.10 hit in early December.
“The fact that the dollar has weakened has obviously helped to sustain its rally. We are going to be looking towards the $1,200 level again,” said Darren Heathcote, head of trading at Investec Australia in Sydney.
NYMEX crude for February delivery rose 61 cents to $83.36 a barrel, elevating gold’s appeal as a hedge against inflation, as China’s crude oil imports surged to a monthly record in December.
U.S. gold futures for February delivery hit an intraday high of $1,163 an ounce, its best level since December 8, before slipping to $1,154 an ounce, still $15.1 higher than the previous close.
The dollar slipped on Monday after posting its biggest loss in six weeks last week on disappointing U.S. jobs data, while the Australian dollar rallied on strong exports to China.
“I guess people used the news from China as some kind of excuse to push up gold,” said a bullion dealer in Hong Kong, adding that low U.S. interest rates are also a factor.
“Buying interest is still around because it seems the chance of an increase in interest rates in the first half of this year is fading,” he said.
Friday’s disappointing U.S. employment report was also seen by dealers as a bullish signal for gold..
The world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings fell to 1,119.541 tonnes by January 8, down 3.962 tonnes from the previous business day.