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MTECHTIPS:-Gold prices dip in Asia with markets watch for China devaluation effects

MTECHTIPS:-Gold prices dip in Asia with markets watch for China devaluation effects

Gold prices dipped mildly in Asia on Friday as investors looked for shifts in the outlook for Asioan economies after China’s surprise devaluations this week. On the Comex division of the New York Mercantile Exchange, gold for December delivery traded down 0.14% to $1,114.00 a troy ounce. Silver for September delivery fell 0.12% to $15.380 a troy ounce and copper for September delivery eased 0.08% to $2.352 a pound. Overnight, gold futures erased some of their gains from Wednesday’s surge, as investors locked into profits earned in the prior session and the People’s Bank of China soothed markets by insisting there is no basis for further devaluation of the yuan. Despite further efforts from the PBOC to stabilize its falling currency, USD/CNY remained at near four-year highs at 6.40 after the Chinese central bank cut the Yuan Reference Rate by 1.1%. During a press conference in Beijing, PBOC deputy governor Yi Gang said the central bank is hoping to accelerate foreign exchange market development by improving its yuan pricing mechanism both offshore and on the China mainland. In addition, Gang emphasized that the PBOC has ample foreign exchange reserves to provide strong support for significant depreciations in the currency. Gang also went to great lengths to dismiss reports that the PBOC could depreciate the yuan by as much as 10% on a long-term basis. China is the world’s largest producer of gold and the second-largest consumer behind India.
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