Gold gains after falling to almost $1,200 an ounce as dollar drops against yuan
London — Gold climbed nearly 1% on Tuesday, having drifted near $1,200 an ounce this week, as the dollar fell versus the yuan while investors focused on strong corporate earnings rather than China-US trade tensions. "At the moment gold is more sensitive to the yuan than the dollar [index], so if the dollar is rallying but not against the yuan, gold is stable. The correlation [with the yuan] is almost one on one," ABN Amro commodities strategist Georgette Boele said. Chinese shares jumped the most in more than two years on hopes of new government spending and amid a pause in trade tensions, while the dollar slid versus the yuan and a currency basket. A weak dollar makes dollar-priced gold cheaper for nonUS investors. "We should start bottoming out around $1,200 because we don’t expect a sell-off in the yuan from these levels. We think the authorities will [act to] stabilise it," Boele said. Spot gold was up 0.7% at $1,214.96 an ounce at 10.25am GMT, while US gold futures were up 0.5%...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.