Gold rises to the highest in four weeks

Gold is off to a strong start to the year, rising another $19 today to $2668.

Gold has been able to make headway despite a broadly stronger US dollar and rising Treasury yields. That dynamic will be challenged again today with the US Treasury selling 30-year bonds at 1 pm ET.

Chinese bids are likely helping to sustain the gains in gold. Yesterday, the PBOC revealed that it bought gold for the second consecutive month. Chinese investors may be turning to gold as well with Chinese equities falling 4% to start the year given limited options in bonds and real estate.

Seasonally, gold is typically strong at the turn of the calendar and through the lunar new year, which is on January 29 this year, with holidays running through Feb 4.

Technically, the break above the prior January high clears the way for a return to $2700 but the main hurdle could be further US dollar strength. A big factor in that to wrap up the week will be Friday’s non-farm payrolls report.

This article was written by Adam Button at www.forexlive.com.