Gold Rallies As China’s Turmoil Boosts Safe Heaven Investment
Aug, 13th 03:36
Gold futures ended sharply higher Wednesday, registering a fifth straight gain in the precious yellow metal as turmoil in China roiled markets for a second day.
Beijing’s surprise devaluation of the yuan on Tuesday and its continued actions Wednesday, including intervening to slow the pace of the decline of its currency, have rippled across the globe as concerns about the health of the world’s second-largest economy have intensified.
China’s moves have upended global equity markets, pushing the major indexes into another free fall after Tuesday’s rout.
With that backdrop, gold has drawn some haven appeal from investors looking to turn to assets safer than stocks.
Gold also benefited from weakness in the dollar, measured by the ICE U.S. Dollar Index , a measure of the dollar’s strength against a basket of six rival currencies, which sunk 1% Wednesday and is off 1.3% for the week. A weaker dollar is a boon for dollar-denominated gold, making it more attractive to buyers in other currencies.
Amid the turmoil, gold has tacked on nearly $30 since Friday, when the precious metal closed at $1,094.10 an ounce. Gold futures for December delivery ended up $15.90, or 1.4%, to trade at $1,123.60 an ounce.
Meanwhile, September silver gained about 20 cents, or 1.3%, at $15.48 an ounce.