Gold rises, as China is back from holidays and as dollar remains weak
On Wednesday gold prices edged higher during European trading hours, as China's New Year celebrations finished and as uncertainty over US interest rate rises weighed on the dollar.
Today China returned to business after the week-long Lunar New Year
celebrations. The date is often seen as the start of a new business
cycle in the Asian giant, prompting fresh demand for metals including
gold.
Gold moved up $US10 in fairly short
order as demand was seen from Asia.
Meanwhile, the
dollar declined against most major currencies after US Federal Reserve
Chair Janet Yellen gave no clear indication about when interest
rates will start to rise.
"Overall, we think Yellen's testimony
contained little that might have a decisive influence on gold's price
direction right now. On balance, however, we think it was probably
marginally skewed to the negative side," UBS analysts said.
According to UBS, there was nothing to dissuade it from its view that lift-off will be in
June.
Spot gold prices traded higher in Europe, trading up 0.9 per cent at $US1,207.90/oz.
