· Gold inched down on Tuesday from a two-week high hit in the previous session, as the dollar firmed against yuan, making the precious metal expensive for buyers in the world’s biggest consumer China.
· China’s central bank raised its daily guidance rate for the yuan by the most in nearly 15 months on Tuesday, sparking a demand for dollars.
· Spot gold fell 0.2 percent to $1,209.04 an ounce at 0358 GMT, after hitting its highest since Aug. 13 at $1,212.38 on Monday.
· U.S. gold futures were down 0.1 percent at $1,215.40 an ounce.
· “The downtrend on the dollar has reversed, with markets probably concerned over the (currency) fixing in China. The market is still a little bit nervous overall when it comes to buying into the weaker U.S. dollar narrative,” said Stephen Innes, Asia-Pacific trading head at OANDA in Singapore.
· The yellow metal, however, has recovered after touching 1-1/2-year lows on Aug. 16 at $1,159.60 as the dollar’s run slowed after President Donald Trump criticized the U.S. Federal Reserve for raising interest rates at a time when the government was trying to stimulate the economy.
· “We need a complete flip around momentum in the U.S. dollar for gold to push above $1,230 and move to $1,260. Unless the Fed takes the December rate hike off the table, gold does not have a chance to get near any of those supportive levels,” Innes said.
· Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.
· Spot gold may rise to $1,224 an ounce, as it has broken a resistance at $1,209 per ounce, according to Reuters technical analyst Wang Tao.
· Spot silver was down 0.3 percent at $14.81, after hitting its highest since Aug. 15 at $14.92 on Monday.
· Platinum was up 0.4 percent at $802.74, after touching a two-week high at $807.60.
· Palladium fell 0.1 percent to $947.75. At $950.25, prices matched 1-1/2-month highs hit on Monday.
Reference: Reuters
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