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Investing.com – Gold prices rose in Asia on Friday with the Chinese New Year next week expected to stoke some physical demand as the People’s Bank of China released nearly CNY 2 trillion in extra liquidity on a day when prices data came in stable and other key gold buyer India witnessing a pickup on a lower tax rate for the yellow metal.
Comex rose 0.06% to $1,319.80 a troy ounce.
As well in China, consumer prices rose 0.6%, compared with a 0.7% gain seen for January and at a 1.5% rise as expected . rose 4.3% on year as expected. The ‘s fortunes are closely ties to economic conditions in top trade partner China.
Overnight, gold prices edged lower on Thursday, reaching their lowest level in around a month as the dollar firmed amid expectations of more U.S. interest rate hikes this year.
Gold is highly sensitive to rising U.S. interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal’s appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
The move higher in the yields also came amid news that U.S. Senate leaders reached a two-year budget deal to raise government spending by almost $300 billion.
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Source: Investing.com
