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China stimulus, US rate cut bets lift gold, silver soars above $30 mark

Production of gold at Novosibirsk precious metals plant

By Harshit Verma

(Reuters) - Gold prices, aided by China's stimulus measures, looked poised to clock their second consecutive weekly gain on Friday on renewed hopes for U.S. interest rate cuts, with silver breaking the $30 barrier to hit an 11-year high.

Spot gold rose 1.5% to $2,412.83 per ounce by 1745 GMT, closing in towards an all-time high of $2,431.29 hit on April 12.

U.S. gold futures settled 1.3% higher at $2417.40 per ounce.

"Gold is moving higher despite (an uptick in) the dollar and yields. I think in this instance, China stimulus has helped as we're also seeing other (base) metals do very well," said Bart Melek, head of commodity strategies at TD Securities. [MET/L]

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The market was lifted after China, a major consumer of industrial metals as well as gold, announced "historic" steps to stabilise the crisis-hit property sector.

Spot gold prices are up over 2% so far this week.

Meanwhile, London's gold price benchmark ended the week at a record high of $2402.60 per troy ounce, the London Bullion Market Association (LBMA) said.

"Ultimately gold is responding to the idea that U.S. inflation is probably under control ... any talk of a prolonged period of high interest rates is going to be mitigated," Melek said.

Traders expect roughly two quarter-point cuts from the Fed this year, with November being the most likely starting point. [FEDWATCH]

Lower interest rates tend to boost non-yielding bullion's appeal.

Spot silver jumped 4.8% to $31.02 per ounce after breaking above a major resistance level of $30. The last time silver hit the $30 price level was in early 2021, but sustaining it for an extended period has eluded silver for more than a decade.

"Anytime we're talking about China stimulating, that is accretive for platinum markets," Melek said.

Platinum added 2.3% to $1,081.37, after hitting a one-year high on Thursday. The metal is up 9% so far this week due to continued structural deficits.

Palladium rose 1.2% to $1,007.

(Reporting by Harshit Verma and Rahul Paswan in Bengaluru; Additional reporting by Polina Devitt in London; Editing by Alan Barona)