Investing.com -- Gold prices rose to their highest in a week on Monday, after reports at the weekend confirming that China's central bank continues to add to its holdings.
The People’s Bank of China added some 360,000 ounces, or 11.2 tons, to its gold reserves in March, according to a statement on its website. That represents a generally constant level of buying since the start of the year, once adjusted for the Lunar New Year holidays.
The news adds to evidence that central bank buying will be a big prop for gold this year, as countries such as Russia and Turkey also join the quest for an asset immune to pressure from the U.S. government.
At 07.50 AM ET, the benchmark gold futures contract on Comex was up $6.31, or 0.5%, at $1,301.95 a troy ounce. Spot gold was up by the same amount at $1,297.98.
Gold prices faced a moderate headwind last week from speculators unwinding long positions. The Commodity Futures Trading Commission reported that speculative net long positions fell by nearly a quarter to 94,600 contracts. Even so, that's still well below the extremes seen in the first half of 2017, when net longs were over twice as high.
The outlook for the yellow metal has brightened in recent weeks on signs from central banks around the world that they don't want to raise interest rates this year. That has pushed the yield on the benchmark 10-year U.S. Treasury note down to 2.50% from 3.25% in November.
Returns on benchmark German and Japanese 10-year paper are now even less attractive. The 10-year Bund yields 0% and its its Japanese counterpart -0.04%.
The International Monetary Fund and the World Bank hold their spring meetings this week, with the IMF’s latest updates to its World Economic Outlook likely to reflect a downward revision to growth forecasts around the world. Both the Federal Reserve and the European Central Bank have already cut their domestic growth forecasts for this year, while China's top policy-making body has also guided for a further slowdown at home.
Elsewhere in commodity markets Monday, Silver Futures were up 0.3% but still essentially range-bound at $15.13 an ounce, while palladium was at $1,349.50, still consolidating after its sharp pull-back two weeks ago. Copper was up 0.8% at $2.92 a pound.