Gold and silver prices soar in China

Due to a weakening of the U.S. dollar, gold and silver prices increased dramatically during the first day of trading in July, in China. The price of gold rose to nearly 160 yuan a gram and the price of silver exceeded 3000 yuan per kilogram.

Analysts believe that the indication of the end to interest gains made in a statement of U.S. Federal Reserves last week caused the U.S. dollar to weaken and international gold prices to grow. After international gold prices exceeded US$ 600 an ounce, short coverings began to play an active role in international gold market. As well as this, the U.S. has a buoyant demand for petrol before U.S. Independence Day Holiday. Meanwhile, international oil prices are still rising, which is also a factor to spur growth in gold prices.

After a wait-and-see period, gold trade becomes brisk in China.

However, insiders do not think the price of silver is likely to have much growth potential in China as Chinese enterprises have no intention of buying great quantities of higher-price silver sold by Chinese silver producers and dealers during the coming off-season.

By People's Daily Online