Gold climbs $25 in a fresh challenge to all-time highs

Gold is shining again today, up $25 to $2519 in a quick recovery after a three-day decline that ended Tuesday.

It’s an impressive bounce that runs counter to recent seasonal weakness in Sept/Oct.

There is a sense that China is behind the buying, particularly Chinese investors who have been burned by real estate and domestic equities. The PBOC is also building gold reserves but it’s not clear how price-sensitive they are. Earlier this year, it looked like they wanted to pause buying above $2200 but they may have decided those levels are unlikely to return.

The latest pop in gold price came on US dollar weakness on a soft ADP employment report but was erased on steady initial jobless claims. That’s left gold $16 from the all-time highs and it will be a stretch to break that before non-farm payrolls.

A big lift for gold is coming from the Treasury market where US 10-year yields are down to 3.73%. Other sovereign yields are also falling and that’s reducing competition for gold.

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