Gold rose to its best in months as the dollar continued to decline following the meetings of the Bank of Japan and Federal Reserve earlier this week.
Spot gold was trading almost US$22 higher at US$1,287, with similarly sharp gains for silver at US$0.30 to US$17.84 and platinum US$23 to US$1,070.
Disappointing US GDP numbers also unsettled the dollar and with the Fed repeating it will be cautious with its rate rise policy, the US currency was under pressure all round.
Gold and the dollar traditionally move in opposite directions.
The metal’s strength has been in spite weak physical demand so far this year.
Earlier this week, Thomson GFMS suggested demand from China had slumped in the first three months of 2016.
Figures from the China Gold Association seemed to confirm this.
China decreased by 3.9% year-on-year to 318 tons, with jewellery demand dipping by 14% though demand for coins and bars was much better.
Silver’s renaissance meanwhile is set to continue according to ABN Amro.
“The main difference between gold and silver is that silver has substantially more industrial applications than gold.
“When the overall outlook on China became less negative as Chinese data stabilised, the industrial demand outlook for platinum, palladium and silver improved.”
Improvement in the global manufacturing index has also helped and as cyclical for these precious metals has eased they have started to outperform gold prices.
“The long-term average in the gold/silver ratio is around 57 (since 1970s). We think that a move back to 60 in the gold/silver ratio is quite likely.”
Major share price moves
Randgold Resources up 200p at 6,725p
Fresnillo up 16p at 1,111p