China's weak economy is spurring demand for gold from the population, which has turned to this traditional safe haven asset to hedge against financial uncertainty. This is pushing precious metal quotations to new highs. However, the economic situation in China is not the only factor contributing to the rally - an additional driver is now too high dollar exchange rate, reports Business Insider.

This circumstance makes imports for developing countries too expensive, and in this situation their interest in gold is growing. According to the World Gold Council, the largest volumes of precious metal are purchased by China, Turkey and India. According to the official statistics of China, the central bank of the country in April increased reserves by 60 thousand ounces, continuing purchases for the 18th month in a row.

The dollar index has risen by 4% this year amid expectations that the Fed will postpone interest rate cuts.