Gold bugs had counted on the recent U.S. interest rate cut, but it’s China’s currency devaluation that’s providing a windfall now to longs in the yellow metal.
Both bullion and futures of gold hit six-year highs on Monday as the tit-for-tat action between China and the U.S. in their growing trade war led to spiraling safe-haven demand.
Spot gold, reflective of trades in bullion, traded at $1,465.24 per ounce by 2:18 PM ET (18:18 GMT), up $24.25, or 1.7%, as China allowed the yuan to tumble to its weakest level in a decade against the dollar to retaliate against the U.S. president’s plan to impose new tariffs.
Beijing added to the blow of the devaluation by ordering state-owned companies to suspend imports of U.S. agricultural products.
Spot gold earlier rose to $1,469.74, its highest level since May 2013.
Gold futures for December delivery, traded on the Comex division of the New York Mercantile Exchange, settled up $19, or 1.3%, at $1,476.50. It surged to $1,481.75 earlier, a peak not seen since Sept 2013.
Source : Investing.com