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MTECHTIPS:-Gold Off Three Week Highs On Demand Worries

MTECHTIPS:-Gold Off Three Week Highs On Demand Worries

MCX Gold futures dropped near Rs 25800 per 10 grams mark in intraday moves yesterday as the yellow metal endured some losses after a runway rally this week. COMEX Gold hit a three week high above $1120 per ounce amid a panic set by the China’s unexpected devaluation of the yuan. China’s central bank devalued the Yuan by nearly 2%, allowing the currency to fall to levels last seen in 2011, in an effort to make the country’s exports more competitive. However, the global stock markets seem to have digested the news as some solace returned in equities kept a tab on gold. Gold was also hit by demand worries. Global Gold demand declined to 914.9 tonnes (t) in the second quarter – a 12% year-on-year drop – as consumers faced a number of challenges, according to latest Gold Demand Trends from the World Gold Council (WGC). COMEX Gold dropped from highs above $1120 per ounce following this and extended the losses today as well. The metal is quoting at $1113 per ounce, down 0.23% on the day. MCX Gold futures are set to drop in early moves amid these cues after closing near Rs 26900 per 10 grams yesterday. A break under Rs 26800 mark can trigger a further selloff in the metal though weakness in the INR needs to be closely watched out.

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