Physical buying from China drives gold rally, safe haven demand absent
Gold for December delivery traded up $37.30, or 2.3%, at $1,673.10 an ounce on the New York Mercantile Exchange in early afternoon trade Monday, after climbing more than $40 earlier to touch an intraday high of $1,676.70.
Gold's gains come amid strong buying during China's Golden Week despite the fact that buyers have to contend with bullion that is $300/oz more expensive than last year. Traders reported that the price of gold has been moving up and down in sync with the S&P 500 in the last four sessions, while the safe-haven buying that spurred the metal's three-year rally was largely absent. Other precious metals also benefited from a near 2% drop in the dollar index.