- China resumes buying gold after six-month pause
- US CPI expected on Wednesday
- Syrian rebels seize control of Damascus; Assad flees to Russia
Dec 9 (Reuters) - Gold prices gained on Monday, with support from top consumer China's central bank resuming gold purchases after a six-month hiatus, while investors awaited U.S. inflation data this week for clues into the Federal Reserve's next move.
Spot gold gained 0.5% at $2,646.69 per ounce, as of 0741 GMT. U.S. gold futures were up 0.3% to $2,668.20.
Gold is supported by headlines that China's central bank resumed purchasing gold in November, which could be "good news for gold bulls" in knowing that they have the People's Bank of China (PBOC) behind them to underpin some strength for bullion prices, IG market strategist Yeap Jun Rong said.
Resumption of its purchases may support Chinese investor demand, which has been muted since the PBOC paused its 18-month buying streak in May.
"The decision to increase gold holdings, particularly following Trump's recent election victory, reflects the PBOC's proactive approach to safeguarding economic stability amid evolving global conditions," OCBC analysts said.
Robust central bank buying, monetary policy easing and geopolitical tensions have driven gold to multiple record highs this year, setting the metal on track for its best year since 2010 with a nearly 28% increase so far.
Gold is seen as a safe-haven investment during times of economic and political uncertainty and thrives in a low-interest rate environment.
Traders are now looking forward to U.S. inflation data on Wednesday.
"The inflation read may determine if we will have a hawkish cut from U.S. policymakers next week, which could still see the U.S. dollar stronger and gold prices weaker if the Fed were to set the stage for a pause in the rate-cutting process into early-2025," Yeap said.
On the geopolitical front, Syrian rebels seized the capital Damascus and President Bashar al-Assad fled to Russia after a 13-year civil war and six decades of his family's autocratic rule.
Spot silver gained 0.8% to $31.22 per ounce, platinum added 1.1% to $940.00 and palladium rose 1.5% to $970.00.
Reporting by Rahul Paswan in Bengaluru; additional reporting by Swati Verma; Editing by Sherry Jacob-Phillips, Mrigank Dhaniwala and Sumana Nandy
Source: Reuters