• News
  • Columns
  • Interviews
  • BW Communities
  • BW TV
  • Subscribe to Print
BW Businessworld

Silver Surges To 10-month High; Lifts Gold

The surge boosted gold to a session high of $1,246.40 an ounce, up more than 1 per cent, after it dipped 0.3 per cent earlier in the day in choppy trading

Photo Credit : Reuters


Silver jumped 3 per cent to its highest in more than 10 months on Tuesday on a softer dollar and robust buying in China, helping to lift gold by 1 per cent.

After quiet trading early in Asia, spot silver surged 3 per cent to $16.73 an ounce, its highest since June 2015. It pared some gains to trade up 2.5 per cent at $16.628 by 0740 GMT.

The surge boosted gold to a session high of $1,246.40 an ounce, up more than 1 per cent, after it dipped 0.3 per cent earlier in the day in choppy trading.

"Gold is following silver higher," said Ronald Leung, chief dealer, Lee Cheong Gold Dealers, Hong Kong.

"One reason is that the dollar is weakening. Another reason is that there is heavy buying in silver in Shanghai. And that has triggered buying in gold as well," Leung said.

The most traded silver contract on the Shanghai Gold Exchange jumped as much as 4.3 per cent to 3,595 yuan per kilogram ($17.28 per ounce).

Another trader said spot silver triggered stops once it breached the $16.30 level, prompting heavy purchases.

The dollar fell 0.2 per cent against a basket of major currencies on Tuesday. Commodity currencies rose against the U.S. dollar, drawing support from oil prices which stabilised after a slide.

Oil prices gained on Tuesday as a strike in Kuwait cut huge amounts of crude out of the supply chain, but analysts said the disruption would be short-lived and that markets would soon refocus on a global supply glut.

A major index of Asian shares rose to five-month highs on Tuesday, but that did not damp demand for gold, often seen as a safe-haven.

Gold traders were also watching for comments from Federal Reserve officials to gauge the outlook for US monetary policy.

The Fed raised rates modestly from near zero in December, its first policy tightening in nearly a decade. While futures markets imply no further hikes until December, Fed projections imply about two more hikes before year end.

The Fed is set to hike interest rates more rapidly than investors currently expect, Boston Fed President Eric Rosengren said on Monday, pushing back on what he said was investors' too pessimistic view of the US economy and monetary policy.

New York Fed President William Dudley said US economic conditions are "mostly favourable", but the Fed remains cautious in raising interest rates because threats loom.

Top gold consumer China launched a yuan-denominated gold benchmark on Tuesday, as the country took an ambitious step to exert more control over the pricing of the metal and boost its influence in the global bullion market.


Tags assigned to this article:
silver gold metals and minerals china dollar