Gold prices dipped Thursday in the US despite further yuan devaluation and speculation of a currency war developing between China and the rest of the global markets.
Gold for December delivery on the Comex division of the New York Mercantile Exchange was last down $9.10 or 0.8 percent $1,114.50 per ounce. Trade has ranged to $1,112.80 to $1,126.30.
Another day, another yuan devaluation by the People’s Bank of China (PboC). Over the last three days, the PBoC has cut the currency by 4.6 percent in attempts to jumpstart exports and clamp down on wild fluctuations in the country’s equity markets.
The country emphasized in a press conference that the devaluation is a temporary or “one-off” attempt to boost the economy.
The Shanghai Composite Index finally responded by rising 1.76 percent to 3,954.56, while the yuan stood at 6.3958.
Even though prices declined today, the gold metal is still trading above the psychological $1,100 an ounce mark.
“Precious Metals slid lightly from their exuberant squeezes yesterday but without much panic to the downside suggesting that there is a dip buying holding the complex up for now,” Triland Metals said. “The mentality of the short term traders has rapidly changed with a bullish currency-war mantra spreading.”
Turning to fundamentals, the World Gold Council (WGC) released a new report demonstrating that global gold demand fell by 12 percent to 914.9 tonnes in the second quarter compared to the previous year.
In Europe, the German final CPI came in as expected, rising 0.2 percent, as did the French CPI, with its forecast 0.4 percent decline. US data scheduled for release later today includes retail sales, initial weekly jobless claims, import prices, business inventories and natural gas storage.
Meanwhile in the US, core retail sales month-over-month in July were in-line with forecasts at 0.4 percent, while retail sales month-on-month in July matched the consensus at 0.6 percent.
US weekly unemployment claims were 274,000, near the prediction of 272,000 and the previous reading of 270,000.
Additionally, import prices month-over-month in July were down 0.9 percent, below the estimate of one percent.
In US equities, the Dow Jones industrial average and S&P were up 0.4 percent and 0.2 percent respectively, while the dollar was 0.1 stronger at $1.1144 against the euro.
As for other precious metals, Comex Silver for September settlement fell 9.6 cents to $15.380 per ounce. Trade has ranged from $15.265 to $15.555.
Platinum for October delivery declined $6.40 to $993.50 per ounce, while the most actively traded palladium contract was at $616.25, down $6.85.
(Editing by Tom Jennemann)
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