Gold extends gain to $40. Silver surges | Forexlive
Gold has a seasonal tailwind in Dec-Jan and now it has a fundamental one.
China’s central bank resumed buying gold for the first time in six months, weekend data revealed. China had halted purchases in May in a move that signalled price sensitivity above $2400/oz. However it looks like they’ve had a change of heart and are now buying above $2600/oz.
As I noted on the weekend, when China halted buying it led to a $50 decline initially and $100 in the following days. So far, we’ve seen a $40 climb to $2673.
Technically, how does it look? The climb above the December highs is good news and a sign we could see a re-test of the late-November high of $2721. Dovish central bank decision between now and Christmas would certainly help and for that to happen in the US, we will need an in-line CPI report on Wednesday.
gold daily chart
Silver, meanwhile, is outperforming with a 3.9% gain compared to the 1.5% rise in gold. Silver is at the best levels since early November after the bulls twice bought dips to $30. It’s trading higher by $1.20 to $32.18 today.