The Chinese gold market Wednesday joined the global buying spree, as jittery investors rushed to the yellow metal in droves to seek refuge from the weakening greenback and the bleak outlook for the US economy.

Gold futures on Shanghai Futures Exchange rose sharply with the most actively traded gold contract for June delivery rising 0.64 percent to 184.2 yuan per gram. The contract has climbed an aggregate 6.4 percent in the past week.

The spot price of Au9995, the most actively traded physical gold product on the exchange, rose 1.2 percent to 186 yuan per gram, with the turnover surging 53.7 percent from the previous trading day to 1.16 billion yuan.

Traders and analysts attributed the latest gold price rally in both the spot and futures markets to the rapidly depreciating US dollar against most major world currencies. The decline was also exacerbated by the recent interest rate cuts.

The US Federal Reserve on Tuesday lowered the target range for the benchmark federal funds rate to zero to 0.25 percent.

The continuous fall in the US dollar has further dented market sentiment, driving larger and larger amounts of international funds to gold.

StreetTracks, one of the world's largest gold funds, yesterday increased its gold positions in the spot market by 3.98 tons to 769.2 tons.

On the New York Mercantile Exchange, the most actively traded gold futures for February delivery rose by 1.5 percent to US$855.7 per ounce, an increase for the third consecutive day.

The somber US economic figures released on Tuesday further deepened investors' pessimistic mood and heightened their need to take refuge in gold, analysts said.

(China Daily December 18, 2008)