Gold continued its march forward as investors found it difficult to ignore a suddenly weaker Chinese currency.
Gold for December delivery on the Comex division of the New York Mercantile Exchange rose $3.60 to settle at $1,107.70 percent. Earlier, the price touched $1,119.10, the highest point since June 20.
Overnight, the People’s Bank of China escalated their involvement in the marketplace by devaluing the yuan 1.9 percent against the dollar.
It is heftiest movement for the Chinese currency against the dollar in over 20 years and is in direct response to falling exports and an attempt to stabilise wild volatility in equity markets.
“Regarding gold, it is strong and it shall get stronger, for the devaluation by the Chinese Central Bank shall entice Chinese buyers of gold to the market… it must; and it will entice others who’ve been standing hard upon the sidelines to follow suit,” Dennis Gartman, publisher and editor of The Gartman Letter, said.
In news, Greece and its lenders reached an 85 billion euro bailout agreement on Tuesday. The 23-hour session led to a three year programme with Greek banks receiving 10 billion euros immediately.
The deal allows the Mediterranean country to repay an existing 3.2 billion euro payment to the European Central Bank due by August 20.
In today’s data, China’s new loans jumped to 1.48 trillion yuan from 1.28 trillion yuan and money supply expanded more than expected too.
While in the US, NFIB small business index in July was in-line with projections at 95.4. Preliminary nonfarm productivity quarter-over-quarter was up 1.3 percent, near forecasts of 1.6 percent, while preliminary unit labor costs quarter-over-quarter came in at a gain of 0.5 percent, exceeding estimates of -0.1 percent.
Additionally, wholesale inventories month-over-month in June rose 0.9 percent, off the consensus of 0.4 percent.
Turning to US equities, the Dow Jones industrial average and S&P were down 1.4 percent and 1.2 percent respectively, while the dollar was 0.1 percent softer at $1.1033 against the euro.
As for other precious metals, Comex Silver for September settlement was unchanged at $15.290 per ounce. Trade has ranged from $15.065 to $15.380.
Platinum for October delivery fell $1.90 to $988.0 per ounce, while the most actively traded palladium contract was at $5.990, down $7.20.
(Editing by Tom Jennemann)
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