Gold on Hold After China Announced Stimulus

Gold futures were little changed after reaching the highest in almost two weeks after a surprise cut in interest rates in China, the world’s second-largest consumer.

The People’s Bank of China lowered the benchmark lending and deposit rates by a quarter percentage point on Saturday. Gold imports by India, the top consumer, may jump to 100 metric tons in March from about 25 tons in February, according to Rajesh Mehta, chairman of Rajesh Exports Ltd.

“China’s action is keeping gold supported,” Tai Wong, the director of commodity products trading at BMO Capital Markets Corp. in New York, said in a telephone interview. “Also, reports about higher imports by India are positive.”

Gold futures for April delivery rose less than 0.1 percent to $1,213.60 an ounce at 9:45 a.m. on the Comex in New York. Earlier, the metal reached $1,223, the highest for a most-active contract since Feb. 17.
The “surprise” cut in Chinese rates “is expected to lift demand for physical gold,” Kitco Metals Inc. in Montreal said in a report.

via Bloomberg

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