Gold prices closed higher Wednesday afternoon in the US as the latest currency intervention by the Chinese government gave the yellow-metal a lift.
Gold for December delivery on the Comex division of the New York Mercantile Exchange increased $15.90 to settle at $1,123.60 per ounce. Trade ranged from $1,101.10 to $1,125.50.
The People’s Bank of China (PBoC) reacted to fresh poor data by devaluing the yuan for the second straight day, with the bank lowering the rate a combined 3.5 percent in two separate actions.
The world’s second largest economy is trying to combat falling exports by lowering the currency, which aids exporters and makes it harder for producers to import goods.
In Chinese data, industrial production year-over-year in July was at six percent, below the forecast of 6.7 percent, while fixed asset investment in the first seven months was at 11.2 percent, the lowest mark since 2000.
Additionally, retail sales year-over-year in July were at 10.5 percent, below the 10.6 prediction.
“Precious metals dip buying is back in fashion again buoyed by currency devaluation and physical follow through demand that was seen sub $1,100,” Triland Metals said. “The tight forward rates were indeed the warning of things to come and we have heard that there was still large physical interest from the East this morning too.”
The Shanghai Composite Index shrugged off the latest move by falling 1.1 percent to 3,886.32.
In the US, the JOLTS job openings in June was 5.25 million, below the consensus of 5.33 million. US crude oil inventories fell by 1.7 million barrels to 453.6 million barrels in the week ending August 8.
Turning to US equity markets, the Dow Jones industrial average and S&P were down 0.5 percent and 0.2 percent respectively, while the dollar was 1.1 percent softer at $1.1164 against the euro.
As for other precious metals, Comex Silver for September settlement rose 20.1 cents to $15.485 per ounce. Trade has ranged from $15.125 to $15.670.
Platinum for October delivery increased $6.60 to $998.90 per ounce, while the most actively traded palladium contract was at $622.94, up $23.70.
(Editing by Tom Jennemann)
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