By Harshit Verma
(Reuters) – Gold prices rose on Monday to hit a record peak for the seventh consecutive session, a move that analysts anticipate could be driven by strong official sector demand from Asia, despite traditional headwinds from a stronger U.S. dollar and elevated interest rates.
Spot gold was up 0.3% at $2,335.70 per ounce as of 1002 GMT, after hitting a record high of $2,353.79 earlier in the session. U.S. gold futures gained 0.4% to $2,354.70.
“Gold bulls may have taken their latest cues from the People’s Bank of China (PBoC), which extended its buying spree of the precious metal for a 17th straight month in March,” said Han Tan, chief market analyst at Exinity Group.
China held 72.74 million fine troy ounces of gold at the end of March, up from 72.58 million ounces at the end of February, official data showed on Sunday.
“With the PBoC as well as the Reserve Bank of India soaking up bullion to buffer their respective reserves, this massive buying spree by global central banks is certainly fuelling spot gold’s price surge.”
Bullion has risen over 13% this year, despite headwinds from strong U.S. economic data, and bets that interest rate cut could be delayed beyond June.
“There’s only two buyers in my book that would have that kind of attitude towards gold. One could be program buying by a central bank. The other alternative, impervious to market fundamentals, is option buying,” said independent analyst Ross Norman.
UBS raised its year-end target for bullion to $2,250 per ounce, in view of firmer demand and with a pickup in exchange-traded-fund (ETF) buying likely ahead.
Meanwhile, non-official physical gold demand in India remained tepid last week as a blistering rally in domestic prices put off buyers in the price-sensitive region, while premiums held firm in top consumer China.
Spot silver was up 1.1% at $27.77 per ounce, platinum climbed 1.2% higher at $937.90 and palladium rose 0.9% at $1,012.10.
(Reporting by Harshit Verma in Bengaluru; Editing by Vijay Kishore)