On Thursday, gold built on its solid gains since the end of a dismal May capitalizing on a weaker US dollar and real interest rates dipping to a one-year low as inflation picks up in the world's largest economy.
In brisk afternoon trading on Thursday gold futures in New York for delivery in August, the most active contract, were trading at its high for the day of $1,274.40 an ounce, up 1% from yesterday's close. Year to date the metal is higher by just over 20%, the best start to a year in a decade.
The $70 an ounce leg up was sparked by Friday's non-farm payroll numbers which resulted in one of the biggest one-day jumps for the metal this this year.
In a research note Capital Economics analyst Simona Gambarini forecasts gold reaching $1,350 by the end of 2016. The independent research firm says while favorable currency movements have boosted the dollar gold price, higher inflation expectations is the main driver of the rally in the metal.
Hong Kong gold exports to China may no longer be a proxy for total Chinese demand but remain an important indicator.
Reported export figures for April fell 4.2% from March, but were higher than a year earlier which ultimately turned out to be a record year for Chinese demand. Last year Chinese gold demand surged mid-to-late year, so don't write this year off yet.
Reuters has reported that net gold exports from Hong Kong to China (figures as released by the Hong Kong Census and Statistics Department) fell from 71.8 tonnes in March to 68.8 tonnes in April - a relatively small 4.2% fall - but actually higher than in March and April 2015.
Gold rose to its highest price in nearly a month as investors bet that the Federal Reserve would hold off raising benchmark interest rates, despite some positive economic data released Thursday.
Gold for August delivery, the most actively traded contract on Thursday, rose about 0.8% to settle at $1,272.70 a troy ounce on the Comex division of the New York Mercantile Exchange. The move is gold's fourth day of gains over the past five trading days and its highest settlement level since mid-May.
The VanEck Vectors Gold Miners ETF traded higher Thursday after billionaire George Soros told the Wall Street Journal that he bought gold and gold miners on the back of a more pessimistic view of the global economy.
Reference: Mining, Seeking Alpha, Fox Business, CNBC
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