Gold rallied 4.5% to $4,257 an ounce on Wednesday, its highest level in six weeks, extending a move that Cointelegraph tied to renewed Chinese ETF buying and central-bank purchases. A weaker dollar against the yen and cooling Strait of Hormuz tensions are background supports, according to InvestingLive, which flagged $4,590 as a next target.
Gold rallied 4.5%, or $180, to $4,257 an ounce on Wednesday — its highest level in six weeks, according to InvestingLive.
China's ETF buying streak drives gains
That builds on an earlier move Wednesday, when renewed Chinese appetite pushed gold up 2.8% to $4,213 an ounce, its best level since June 22. Bloomberg reported that China's domestic gold-backed ETFs booked a 14th straight day of inflows, reversing June, when the same funds posted their worst month of outflows on record, according to World Gold Council data. Even so, year-to-date inflows to Chinese ETFs fell to 40 billion yuan ($5.6 billion), still the second-best first-half performance on record.
Central bank buying reinforces demand
The World Gold Council attributed part of the rebound to the People's Bank of China's 82 tonnes of gold purchases over the 20 months through June, saying "institutional investor participation in Chinese gold ETFs has also risen".
A weak dollar and cooling Mideast risk in the backdrop
Gold had already been carving out a base near $4,000 for five weeks, posting a series of higher highs since a June 30 low. Wednesday's buying started in Asia, a region gold bulls have been watching for signs of demand.
InvestingLive also pointed to background developments that predate Wednesday's move: the US dollar has been weakening against the Japanese yen, the strongest sign yet that the Treasury wants to pursue a weak-dollar policy. President Trump has shown no appetite for escalation over the Strait of Hormuz, easing concerns that emerging oil-importing nations would be forced to sell gold reserves to pay for oil. West Texas Intermediate crude fell back to $75 as well.
InvestingLive flagged the 38.2% retracement of the January-June decline at $4,590 as a reasonable target over the next two months.
Sources: Cointelegraph.com News, Investinglive RSS Breaking News Feed
Trading involves risk.
Risk Disclaimer
