Gold booked gains in today's trading for a fourth consecutive day rebounding from lows hit on February 24th at USD1,190.40 after the Peoples Bank of China cut benchmark interest rates last Saturday for the second time in three months by a quarter percentage point to 5.35% to spur economic growth and ward of deflation in the world's second largest economy. Lower interest rates a positive for gold as the relative cost of owning the precious metal decreases.
A stronger U.S. dollar and the prospect for higher U.S. rates recently weighed on the precious metal, even though the start of an interest rate hike may be delayed, as the precious metal is dollar-denominated and not yield-bearing.
The precious metal is currently quoted at USD1,216.70, 0,35% a troy ounce. On Thursday the 22nd of January gold reached a five-month high at USD1,307.40.