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Gold slips as yuan firms, but still set to snap 7-week losing run
[MANILA] Gold edged lower on Friday after the yuan firmed as China bid to calm jittery global markets, while upbeat US retail sales renewed expectations for a near-term increase in US interest rates.
But bullion was still set to end a seven-week losing streak after China's yuan devaluation earlier this week pushed investors out of risky assets and into those deemed to be so-called safe havens.
Volatile markets were soothed after China's central bank said there was no reason for the yuan to fall further given the country's strong economic fundamentals. "A further decline in volatility may reverse some of bullion's recent 'safe-haven' inspired gains," said HSBC analyst James Steel.
Spot gold was down 0.1 per cent at US$1,113.15 an ounce by 0228 GMT, after peaking at US$1,126.31 on Thursday, its highest since July 20. Thursday's drop ended gold's five-day rise, its longest rally since May.
Still, the precious metal has gained nearly 2 per cent for the week so far, after a seven-week slide that was its longest retreat since 1999.
US gold for December delivery eased 0.3 per cent to US$1,112.60 an ounce.
As fears eased that China was looking at further depreciating its currency after Tuesday's shock devaluation, a rebound in US retail sales in July refreshed hopes that the Federal Reserve could raise interest rates soon.
The yuan devaluation had raised speculation that the Fed could delay the rate hike, which many analysts had predicted to happen as early as next month.
China's gold demand this year is expected to at least hold steady with last year at just under 1,000 tonnes and will not likely be dented by the currency devaluation, the World Gold Council said.
Spot palladium dropped nearly 1 per cent to US$611 an ounce after touching a two-week high on Thursday. Platinum eased 0.5 per cent to US$986.90 an ounce and silver dipped 0.6 per cent to US$15.33.