Gold on three weeks high with Chinese demand increase

Gold fluctuated near a three weeks high after advancing the most in seven weeks as the dollar weakened and signs of increased physical demand in China boosted the metal’s outlook.

Gold has rebounded from a five months low on December 6 to touch $1,268 per ounce, the highest price since November 20, as signs of increased demand in China and the dollar’s weakness countered expectations that the Federal Reserve is set to pare stimulus. Volumes for bullion of 99.99% purity on the Shanghai Gold Exchange, the benchmark spot contract, rose for a third day to 15,224 kilograms yesterday, the most since November 28 this year.