Gold climbs as China demand picks up

Gold prices rose by 150 baht per baht weight at its opening in Bangkok on Saturday.

The Gold Traders Association announced the buying price at 18,550 baht and the selling price at 18,650 baht per baht-weight for gold bars.

The buying price for gold ornaments was 18,282.96 baht per baht-weight while the selling price was 19,050 baht.

In world markets, Bloomberg reported from Melbourne gold headed for its first weekly advance in more than a month on Saturday on signs demand in China is picking up and as investors assess the outlook for US interest rates.

Bullion for immediate delivery added as much as 0.2% to $1,211.76 an ounce and traded at $1,210.20 at 10.13am in Singapore, according to Bloomberg generic pricing. Gold is up 0.7% this week, the first gain since the period to Jan 23. Prices are set to drop 5.7% in February.

Federal Reserve chair Janet Yellen this week reiterated that the timetable for raising interest rates is flexible. She repeated on Tuesday that the Fed’s pledge to be “patient” means an increase is unlikely for “at least the next couple” of meetings. China’s net gold imports from Hong Kong rose last month from December and volumes for the Shanghai Gold Exchange’s benchmark contract climbed 32% on Thursday.

“Moderately good imports to China from Hong Kong for January helped boost prices,” James Steel, an analyst at HSBC Securities (USA) Inc in New York, wrote in a note. “Gold prices have held over $1,200 an ounce despite technical weakness, the near certainty of eventual Fed rate rises, US dollar gains and US yield increases.”

While Mrs Yellen made clear no rate increase is imminent, she told the Senate Banking Committee that the economy is on solid ground and a rate increase “could be warranted at any meeting.” The Bloomberg Dollar Spot Index climbed 0.9% on Thursday and is set for a second weekly advance.

Gold typically trades counter to the dollar, while higher interest rates curb bullion’s appeal as the metal generally gives returns only through price gains.

China’s net gold imports from Hong Kong rose to 71.6 tonnes last month from 58.8 tonnes in December, according to data compiled by Bloomberg from the Hong Kong Census and Statistics Department released Thursday. The country is the world’s biggest consumer after India.

Gold for April delivery was little changed at $1,210 on the Comex. Silver for immediate delivery rose 0.3 percent to $16.6153 an ounce and was poised for a 2.3% gain this week, trimming February’s drop to 3.7%.