KUWAIT CITY, Sept 17: Gold prices surged to $1,923 in response to the weakening of the US dollar against the yuan, spurred by favorable economic data from China, a key consumer of gold worldwide. However, apprehension loomed among investors due to the potential for the Federal Reserve (the US central bank) to raise interest rates once more. Spot gold prices saw a 0.3% uptick, reaching $1,923 per ounce, while US gold futures contracts also gained by 0.2%, closing at $1,936.90.

The yuan appreciated to its highest levels against the dollar in two weeks, following robust August data that exceeded expectations in Chinese factory production and retail sales. This shift in the dollar’s value made gold, priced in US currency, more appealing to international buyers, as reported by Reuters. Despite these advances, gold was still on track for a modest weekly decline after dipping close to the $1,900 mark on Thursday, marking its lowest point since August 23. Yip Jun Rong, an expert in financial markets at IG, remarked, “The anticipation of prolonged high-interest rates is exerting pressure on gold prices, as gold doesn’t yield returns.” He further added, “Current economic conditions in the United States do not appear to warrant an imminent interest rate reduction, with the expected timing of any reduction continuing to be pushed back to the middle of next year.”