The gold price inched lower in Asian trading hours on Thursday but stayed close to its three-week high level reached on Wednesday on support from the recent yuan devaluation by China.
Spot gold was last at $1,120.9/1,121.8 per ounce, down $3 on Wednesday’s close. Trading has ranged from $1,120.8 to $1,126.8 so far.
Earlier on, gold prices had rallied following the yuan devaluation. The spot gold price had reached its highest since July 20 at $1,123/1,124 per ounce on Wednesday.
Analysts expect gold prices to head higher. “Market is still very short, leaving more from (for) upside,” said Commerzbank.
“The next major level to watch for for gold is the break out level from early last month when the market gapped $50 lower at $1,130/32,” said MKS.
On Thursday, the People’s Republic of China had set its midpoint rate at 6.4010 per dollar, down 1.1 percent from its previous fix of 6.3306, and making it the third consecutive day it had lowered the currency. This followed Wednesday’s cut of 1.6 percent and Tuesday’s 1.86 percent drop.
Market observers, however, noted that the gap between the latest fix rate and Thursday’s traded rate has narrowed which suggest that the yuan could be stabilising.
In the spot market, the yuan traded at 6.447 against the dollar so far in the morning.
In other precious metals, silver was at $15.34/15.39 per ounce, down $0.17. Platinum was at $993/998, down $1, while palladium was at $618/623, down $3.
In data, the market will be looking out for the EU’s German Final CPI and French CPI data, and retail sales and unemployment claims data from the US later on Thursday.
On the Shanghai Futures Exchange, gold for December delivery was unchanged at 234 yuan per gram, while December silver was at 3,500 yuan per kilogram, also unchanged.
The post Gold inches lower, but still supported by weaker yuan appeared first on The Bullion Desk.
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