China’s gold futures hit new high as uncertainties in rate hikes in US, Europe boost gold prices

 

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China’s most-traded gold futures contract on the Shanghai Futures Exchange, for October delivery, gains nearly 1.5% to hit 462.2 yuan per gram, marking a new record high.

Gold prices climbed in the international market as US bond yields fell following dovish commentary from a key European Central Bank official. ECB Governing Council member and known hawk Klaas Knot said monetary tightening beyond next week’s meeting is anything but guaranteed. Global bond yields, including US Treasuries fell following the comments, boosting non-interest bearing gold.

The non-farm payrolls in the US came lower than expected and a cooling trend continued in the job market, CPI growth was slower than expected and the upward pressure on prices is gradually easing, said Citic Securities in a note. 

While market expectations for another rate hike in Julys remain stable, expectations for more rate hikes after than have weakened, and combined with continued gold purchases by central banks, gold prices are expected to regain upward momentum, it said.