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Gold rises to a 2-month high, while investors take a critical look at borrowing costs in the U.S. Silver rises to its highest level since March.
Gold is up 9.8% this year on concerns about the recovery in the U.S. Data this week shows that the economy contracted more than expected in the first quarter. Spending on consumer durables, such as cars, household appliances and furniture, fell unexpectedly in May. The Fed is keeping borrowing costs low, causing the Dollar to fall back to the May 9 level.
"U.S. economic data continues to be mixed, although we expect it to eventually improve," said Sun Yonggang, a macroeconomist at Everbright Futures Co. in Shanghai. "We are cautiously bullish for now as long as the Dollar is under pressure, which in turn is positive for gold."
In China, benchmark spot contract volumes on the Shanghai Gold Exchange reached 23,307 kilograms on June 24, the highest since Feb. 10. According to the China Gold Association, circulation in these contracts will be about the same as the record of 1,174.4 tonnes in 2013.
Silver's spot price is at its highest point since March 18. At this rate, silver is heading for an increase compared to the previous quarter, which has not happened since 2011.
Source: Bloomberg
