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Gold Extends Gains as China Pledges More Stimulus

Gold bullions are displayed at GoldSilver Central's office in Singapore June 19, 2017. REUTERS/Edgar Su//File Photo
Gold bullions are displayed at GoldSilver Central's office in Singapore June 19, 2017. REUTERS/Edgar Su//File Photo
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Gold Extends Gains as China Pledges More Stimulus

Gold bullions are displayed at GoldSilver Central's office in Singapore June 19, 2017. REUTERS/Edgar Su//File Photo
Gold bullions are displayed at GoldSilver Central's office in Singapore June 19, 2017. REUTERS/Edgar Su//File Photo

Gold prices extended gains on Tuesday, buoyed by top consumer China's pledge to ramp up policy stimulus to help spur economic growth, with investors awaiting US inflation data for further insights into the Federal Reserve's interest rate outlook.
Spot gold was up 0.4% at $2,669.25 per ounce, as of 0737 GMT. US gold futures rose 0.2% to $2,691.60, Reuters reported.
Gold hit a two-week high on Monday, supported by China's central bank resuming purchases after a six-month hiatus.
The country will also adopt an "appropriately loose monetary policy" next year, alongside a more proactive fiscal policy to spur economic growth, the Politburo was quoted as saying.
This is "a shift from a 'prudent' stance that has been held for nearly 14 years. Hence, a further reduction of interest rates in China may spur higher demand for gold purchases," said Kelvin Wong, OANDA's senior market analyst for Asia Pacific.
"Secondly, the safe-haven demand narrative has resurfaced as China has started a probe into the US AI juggernaut Nvidia over an alleged violation of anti-monopoly law, suggesting more tit-for-tat measures may arise between the U.S. and China."
Traders are now focused on US inflation data for November after last week's stronger-than-expected payrolls report boosted the chances of a Fed rate cut next week.
The odds of a quarter-point rate reduction on Dec. 18 are currently at 89.5%, according to the CME Fedwatch tool.
The European Central Bank is also expected to cut rates by a quarter point at its policy meeting on Thursday.
Gold, which pays no interest, tends to benefit from lower interest rates as this reduces the opportunity cost of holding bullion.
Elsewhere, the United States and Britain have announced a new wave of sanctions targeting illicit gold trade.
Spot silver added 0.2% to $31.86 per ounce, platinum shed 0.4% to $935.20 and palladium was trading 0.4% lower at $969.90.

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IMF Policy Committee Underscores Trade Risks to Global Economy, Commits to Fund’s Role

International Monetary Fund (IMF) Managing Director Kristalina Georgieva, right, and International Monetary and Financial Committee (IMFC) chair Saudi Arabia's Finance Minister Mohammed Al-Jadaan speak during a news conference after the International Monetary and Financial Committee (IMFC) meeting, during the World Bank/IMF Spring Meetings at the International Monetary Fund (IMF) headquarters in Washington, Friday, April 25, 2025. (AP)
International Monetary Fund (IMF) Managing Director Kristalina Georgieva, right, and International Monetary and Financial Committee (IMFC) chair Saudi Arabia's Finance Minister Mohammed Al-Jadaan speak during a news conference after the International Monetary and Financial Committee (IMFC) meeting, during the World Bank/IMF Spring Meetings at the International Monetary Fund (IMF) headquarters in Washington, Friday, April 25, 2025. (AP)
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IMF Policy Committee Underscores Trade Risks to Global Economy, Commits to Fund’s Role

International Monetary Fund (IMF) Managing Director Kristalina Georgieva, right, and International Monetary and Financial Committee (IMFC) chair Saudi Arabia's Finance Minister Mohammed Al-Jadaan speak during a news conference after the International Monetary and Financial Committee (IMFC) meeting, during the World Bank/IMF Spring Meetings at the International Monetary Fund (IMF) headquarters in Washington, Friday, April 25, 2025. (AP)
International Monetary Fund (IMF) Managing Director Kristalina Georgieva, right, and International Monetary and Financial Committee (IMFC) chair Saudi Arabia's Finance Minister Mohammed Al-Jadaan speak during a news conference after the International Monetary and Financial Committee (IMFC) meeting, during the World Bank/IMF Spring Meetings at the International Monetary Fund (IMF) headquarters in Washington, Friday, April 25, 2025. (AP)

International Monetary Fund member countries said on Friday that rising trade tensions were sapping growth and fueling uncertainty as well as market and financial stability risks, but reaffirmed their commitment to the institution as critical to helping countries navigate a difficult environment.

In a chair's statement, the IMF's steering committee also reaffirmed prior foreign exchange commitments and voiced support for a realignment of quotas, or shareholding, that better reflects countries' positions in the global economy.

"The world economy is at a pivotal juncture," the International Monetary and Financial Committee (IMFC) said in a statement as the spring meetings of the IMF and World Bank drew to a close. "Following several years of rising concerns over trade, trade tensions have abruptly soared, fueling elevated uncertainty, market volatility, and risks to growth and financial stability."

The message comes at the end of a tense week for policymakers and investors anxious about US President Donald Trump's moves to upend global trade and his commitment to international institutions.

The IMF on Tuesday slashed its economic forecasts for the US, China and most countries, citing the impact of US tariffs now at 100-year highs and warning that rising trade strife would further slow growth. It forecast global growth of 2.8% for 2025, down half a percentage point from its January forecast.

Saudi Arabia's Finance Minister Mohammed Al-Jadaan, who chairs the International Monetary and Financial Committee (IMFC), said the Fund must continue to focus on its core mandates, including expanding trade and growth.

"Addressing global debt vulnerabilities remains a priority for our members, especially for low-income and vulnerable countries," Al-Jadaan told a news conference in Washington.

IMF Managing Director Kristalina Georgieva acknowledged that the raft of current geopolitical flare-ups, especially Trump's push to redesign world trade with a barrage of tariffs, had distracted from discussions about other pressing challenges, including artificial intelligence, in public and behind closed doors.

She said it was encouraging that members had been able to engage in open conversations and share their views "in a fair space," but said she didn't want to minimize the discord.

"I don't want to sugarcoat - we still have quite a challenging time," she said at the news briefing.

Gathering members to talk about Syria had also given a new sense of urgency and purpose to turning a place of conflict into a stable and economically successful country benefiting the region and the world, Al-Jadaan said.

"It is not just about the money, it's about the work that I and other partners can deliver and capacity development, quality data and timely advice."

Al-Jadaan said trade had been the overriding concern during the meetings but he remained optimistic that solutions could be found after a week of candid and frank discussions.

"Actually today, we are holding in a lot better position than when we started the week. People understand the consequences and are working together in a constructive way to resolve tensions," he said.