Gold prices climbed after China’s People’s Bank said it would allow more foreign companies to trade on the Shanghai Gold Exchange, which will lead to an increase in imports and exports of the yellow metal. Gold demand has increased during H1 in China after the government introduced a series of monetary tightening measures to prevent the booming economy from overheating, prompting investors to put more money into safe haven assets.
China’s decision to loosen up its gold market has a positive impact on the gold price, which got more support from a strong physical demand from the world’s largest gold consumer India ahead of the upcoming festival season.
Bank UBS (NYSE:UBS) said that its gold sales to India reached the highest level in 20 months.
Gold improved to US$1,185/oz today. Silver followed, rising to US$18.40/oz, while platinum declined to US$1,588/oz.
Major mining stocks were mixed. Gold miner Randgold Resources (LON:RRS) declined 1.2%, while peer from the FTSE 250 Petropavlovsk (LON:POG) posted a small loss. African Barrick Gold (LON:ABG) did better, posting a small gain.
Silver miner Fresnillo (LON:FRES) was just above the opening level and platinum miner Lonmin (LON:LMI) was flat.
Silver producer Hochschild Mining (LON:HOC) was little moved, while another midcap Aquarius Platinum (LON:AQP) slipped 5.3%.
Specialty chemicals firm Johnson Matthey (LON:JMAT) was sitting just below the opening level.
Turkey and Saudi Arabia operating gold explorer KEFI Minerals (LON:KEFI) soared 50% to take the lead in the sector. Turkey focused gold miner Ariana Resources (LON:AAU), Africa operating gold miner GMA Resources (LON:GMA) and copper and gold miner EMED Mining (LON:EMED) followed, climbing 15%, 13% and 10% respectively. Canada based junior gold developer Rambler Metals and Mining Plc (LON:RMM) moved up 7%.