Market News

(Bloomberg) -- Gold extended gains as the world’s biggest bullion buyer came back from holiday and bolstered demand.

The precious metal rose as much as 1.6% to above $3,387 an ounce, spiking as markets opened in China after a five-day break. Gold has also gained support from a weaker dollar, which slid against Asian currencies on Monday, most notably the Taiwan dollar.

Trading in gold contracts on the Shanghai Futures Exchange has hit record volumes in recent weeks, even as the exchange tightened margin requirements to try quell speculative fervor.

Bullion’s status as a safe haven has been reinforced by the market chaos unleashed by US President Donald Trump’s aggressive trade policy. His moves to impose, then pause, sweeping tariffs on imports have undermined the dollar’s traditional role as a haven and led investors to boost allocations away from US assets.

The precious metal has surged by more than a quarter this year, hitting a record just above $3,500 an ounce in April, before losing some ground in the last couple of weeks. The ascent has been driven by haven buying as the trade war unnerved investors, as well as by speculative demand in China and central-bank purchases.

Spot gold rose 1.5% to $3,382.85 an ounce at 11:08 a.m. in London. The Bloomberg Dollar Spot Index rose 0.1%. Silver, palladium and platinum climbed.

Investors across markets are looking ahead to the Federal Reserve’s midweek interest-rate decision. Policymakers are widely expected to hold rates steady when they conclude their meeting on Wednesday, despite Trump ratcheting up pressure on Chair Jerome Powell to loosen. Lower borrowing costs tend to benefit bullion as it doesn’t pay interest.