Gold was stable on Friday morning with investors switching their focus to the US after China lifted the yuan against the dollar for the first time following three consecutive days of cuts.
The spot gold price was last at $1,116.5/1,116.9 per ounce, up $1.70 on the previous close. Trade has ranged from $1,112.5 to $1,117.8 so far.
Today, China’s central bank raised its reference rate for the first time since Tuesday’s devaluation. The value of the yuan against the US dollar was set 0.05 percent stronger than the previous day’s fix. The People’s Bank of China (PBoC) reassured investors on Thursday saying there is no reason for the yuan to fall further.
“Without the volatility of the yuan to the extent we have seen in recent days the precious metals should see muted price action on Friday,” MKS said.
“Expect focus to shift back to the potential US rate rise and, as such, we may see the metals trade with a softening bias,” it added.
The probability of the US Federal Reserve raising interest rates in September is now just shy of 50 percent, Commerzbank noted.
Elsewhere, the Greek parliament has passed the country’s third bailout package following an all-night parliamentary session. The three year package, worth approximately 85 billion euro, includes harsh spending cuts and increases in taxes.
In data, French GDP data was flat and below expectations for a 0.2 percent gain, Germany’s GDP came in at 0.4 percent, up from the previous reading of 0.3 percent, but slightly below expectations.
French non-farm payrolls number was better than expected at 0.2 percent while Italian GDP disappointed at 0.2 percent.
EU CPI and GDP are still to come and there is a Euro group meeting this afternoon to decide whether to let a three-year bailout for Greece go ahead.
US data includes PPI, industrial production, capital utilisation rate and University of Michigan consumer sentiment and inflation expectations.
In the other precious metals, silver was little changed at $15.42/15.47. Palladium at $618/623 climbed $5 and platinum at $990/995 was up $1.
The platinum price briefly rose above the $1,000 per troy ounce mark in the past two days, no doubt partly as the result of significant inflows into the ETFs, Commerzbank noted.
Yesterday, they saw inflows of 51,300 ounces – the most pronounced daily inflow since May 2014, it added.
(Editing by Kathleen Retourne)
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