MNI POLICY: Gold, Asia to Gain on Dollar: Renmin Researcher

A weakening U.S. dollar is likely to further boost demand for gold and drive capital to Asian economies including China, wrote Sun Chao, a researcher at the International Monetary Institute of Renmin University in an article in the China Daily on Friday.

Sun said that gold may still be in the early stage of a rising cycle, despite the price tumbling 4.7% to $1,932.28 on Tuesday, after a multi-week rally and crossing the record high of $2,000 per ounce.

The flow of more capital into Asian markets will boost the recovery in China, which has recovered better from the pandemic along with other Asian nations, Sun wrote.

Should inflation in the U.S. rises further as the market expects, U.S. nominal interest rates are sure to increase even if the dollar's actual interest rate remains unchanged, meaning gold prices could rise further.