By Paul Ploumis 12 Aug 2015 Last updated at 05:38:19 GMT
(Kitco News) - Gold prices ended the U.S. day session modestly up and hit a three-week high Tuesday, on follow-through buying from Monday’s gains. The near-term technical pictures for both gold and silver markets are improving, which is inviting fresh speculative buying interest and giving the sellers pause for the first time in weeks. December Comex gold was last up $3.60 at $1,107.60 an ounce. September Comex silver was last down $0.002 at $15.29 an ounce.
The big news of the day saw the Chinese government devalue its currency, the yuan, by 1.9% on Tuesday. China has been implementing economic and monetary measures to resuscitate its flagging economy. The move by China shook the financial world, with markets selling off. The gold market saw little reaction to the China news. There may have been some modest buying support moving into safe-haven gold amid the keener risk aversion Tuesday.
The weaker yuan will make imported goods into China—the world’s most populous country and the second-largest economy—more expensive. It will also make Chinese-produced goods cheaper on the world export market. The government devaluation of the yuan also will hurt China’s domestic companies and municipalities that have debts outside of the country. China is the world’s largest raw commodity importer, and those raw commodities have just become more expensive for China to import. The heretofore beaten-down raw commodity sector just got another dose of bad news.
The U.S. dollar index was little impacted on the China yuan devaluation. Meantime, the other key “outside market” saw crude oil prices lower and scoring a four-month low on news that OPEC is pumping oil at the highest rate in three years, despite plummeting oil prices. It appears the cartel is trying to “break” the U.S. shale production industry that has changed the landscape of the world oil markets.
There was a downbeat economic report coming out of the European Union Tuesday, as the strongest economy in the union, Germany, reported its ZEW economic expectations index came in at 25.0 in August from 29.7 in July. A reading of 32.0 was expected. That news helped to pressure the Euro currency and support the U.S. dollar index.
Reports said India’s government in September will monetize gold owned by consumers. India is a major gold importer.
The London P.M. gold fix is $1,108.25 versus the previous A.M. fix of $1,113.25.
Courtesy: Kitco News