Forexpros – Gold prices rose in U.S. trading on Friday after China reported its second-quarter gross domestic product growth rates came in line with expectations at 7.6%.
While the lowest rate in three years, the figures sparked demand for riskier assets, which was bullish for gold.
Talk that China will stimulate its economy via monetary loosening measures anyway further bolstered the precious metal.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded up 1.75% at USD1,592.65 a troy ounce, up from a session low of 1567.15 and down from a high of USD1,596.45 a troy ounce early during the session.
Gold futures were likely to test support at USD1,576.85 a troy ounce, the low from July 8, and resistance at USD1,601.25, the high from July 10.
Gold soared on feeling that either way investors viewed China’s growth figures, the yellow metal was due for gains.
China’s GDP growth rates sparked some demand for risk, as the figure did largely meet expectations.
Risk-on trading sessions tend to send the dollar falling.
Gold and the dollar often trade inversely from one another.
However, sentiments that the Chinese government has room to stimulate its economy even further also bolstered gold, as stimulus measures make gold an attractive hedge since they weaken paper currencies to spur recovery.
Weak consumer sentiment figures in the U.S. prompted talk the Federal Reserve may unleash a news round of quantitative easing, which are asset purchases from banks that pump liquidity into the economy, weakening the dollar in the process.
In the U.S., the Thomson Reuters/University of Michigan’s preliminary reading on the overall index on consumer sentiment fell to 72.0 in July from 73.2 in June.
Analysts were expecting a 73.4 reading.
Elsewhere on the Comex, silver for September delivery was up 0.76% and trading at USD27.368 a troy ounce, while copper for September delivery was up 2.53% and trading at USD3.501 a pound.
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