Gold prices continued to ease giving back $2.50 in the Asian session as prices slowly return to their bearish trend after the short term rally caused by
Gold traders freaked on Tuesday as the yuan fell 2% and continued to decline on Wednesday, until the central bank intervened. Thursday’s comments quelled market fears as commodities began to recover. Gold is trading at 1113.10 with silver on its heels at 15.375 and platinum at 989.50.
Asian markets are trading mixed as the market was reassured by the Chinese regulators that they will keep the Yuan stable at a reasonable level so as to slow the sharp descent. After the easing fears of currency war the focus now shifts to oil prices that plunged to six-year lows on supply concerns.
The US Dollar strengthened by 0.1 percent yesterday after the release of robust retail sales data that showed a rebound suggesting growth in the economy in the third quarter and bolstering the case for a Federal Reserve interest rate hike. Moreover, the Chinese central bank continued to guide yuan at a stable reasonable level that acted as a positive factor however, with a milder reaction than previous sessions.
However, investors fretted over the slowdown in Chinese economy which could possibly delay the interest rate hike move by the US Federal Reserve that acted as a negative factor.
Gold declined ending its longest run of gains in almost three months, as China eased concern about a devaluation of its currency. Silver and palladium dropped. Secondly the dollar climbed for the first time in seven days against the euro after China’s central bank sought to temper concern that it wouldn’t sufficiently support the yuan. US data remained mixed for the metals yesterday. China’s gold demand improved last month with some large-sized orders, Roland Wang, managing director of World Gold Council in China said. Dollar stability on delaying rate hikes speculations and rising festive demand in Asian markets may support the premium. Gold is expected to trade in range of $1090-$1130 in coming days, Silver surpassed the level of $15 thus upside cap becomes $15.50.