Gold soared on Wednesday as the tumble in Asian shares sparked haven demand on gold, while the drop in the dollar gave another impetus.
The precious metal soared to a high of $1096.66 an ounce, while currently trading around 1096.02, compared to the session’s opening at $1087.10.
Worries returned to the market again with the fall in oil prices and amid worries from China, causing a drop in Asian shares to four-year lows.
Brent crude surrendered its earlier gains on Tuesday to end the session at $28.71 a barrel, while currently trading lower at $27.82, the lowest since 2003.
On the other hand, a report from China signaled a 5.8 percent in foreign direct investment in December as the weaker yuan weighed on inflows.
Haven demand helped gold to rise along with other safe-haven currencies, led by the yen and the euro.
The dollar, on the other side, tumbled against a basket of major currencies to hover around 98.90, according to the dollar index.
The retreat in the dollar encouraged some demand on bullion as an alternative investment, yet some analysts believe that the weak physical demand from Asian has kept gains limited.
Later in the day, the U.S. will release its CPI inflation data that is likely to shape the future of rate increases by the Federal Reserve.
CPI for the month of December probably stalled for a second straight month, according to median forecasts.
