Gold and other precious metals rallied on Monday, after data showed the Chinese has grown mirroring forecasts. Signs of a more dovish U.S. Federal Reserve contributed to the biggest weekly advance for the precious metals in nearly two years.
As of 2:56 ET, gold for immediate delivery rose 0.58 percent or 7.35 points, to trade at $ 1,286.25 after opening at $1,284.56, having earlier hit a high of $1,294.50 and a low of $1,284.56.
Official data released early Monday showed that China`s economy expanded 7.5 percent from a year earlier in the second quarter. Growth was slower than the previous quarter`s 7.7 percent expansion as weak trade and a clampdown on lending took their toll.
The slowdown fueled speculation that policymakers at the People’s Bank of China will act to safeguard their growth goal of 7.5 percent for the year, even as Premier Li Keqiang signals reluctance to boost stimulus and attempts to reduce financial risks.
Other precious metals:
- Silver was up 0.32% to trade around $ 19.93
- Platinum gained 0.28% to $ 1,412.75
- Palladium inched 0.55% up to $ 826.75
Last week, Fed Chairman Ben Bernanke's tregarding ahighly accommodative monetary policy for the foreseeable future caused asset prices to move sharply higher. While minutes from the Fed’s June policy meeting showed that many policymakers feel the stimulus program should be scaled back this year, many others wanted reassurances the U.S. jobs recovery was on solid ground first.
The USDIX is currently trading around 83.21 after opening at 82.09, and hitting a high of 83.22 and a low of 83.02.
Hedge funds raised bets on higher gold prices for a second week as Bernanke’s comments damped expectations stimulus will be cut soon. Holdings in SPDR Gold Trust, the world`s largest gold-backed ETF, are near four-year lows.