old prices climbed to a two-week high on Tuesday, buoyed by renewed demand from China as markets reopened following the early May holiday. Spot gold rose 1.6% to $3,388.81 per ounce, nearing the $3,400 mark, while U.S. gold futures increased by nearly 2.1% to $3,392.60 per ounce.
The rally coincided with the resumption of trading in China, the world’s largest gold consumer. Data from the Shanghai Futures Exchange indicated record trading volumes in recent weeks, reflecting robust investor interest.
“The bull market is being driven by China’s latest gold investing surge, plus the ongoing bid from central banks wanting to cut their exposure to U.S. assets, most especially the dollar,” noted Adrian Ash, BullionVault’s director of research.
Concurrently, the U.S. dollar experienced weakness as investors grew cautious over potential trade deals, further enhancing gold’s appeal as a safe-haven asset.
However, on Wednesday, gold prices experienced a pullback, declining by 1.3% to $3,383.88 per ounce. This retreat was attributed to growing optimism over U.S.-China trade negotiations, which diminished the appeal of safe-haven assets like gold.
Investors are now closely monitoring the Federal Reserve’s policy decision, with the central bank expected to maintain current interest rates while addressing uncertainties stemming from the trade war.