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MTECHTIPS:-Gold dips but holds near 6-week top as global equities plunge

MTECHTIPS:-Gold dips but holds near 6-week top as global equities plunge

Gold prices eased slightly on Monday, but held near a six-week peak as steep losses in global equity markets and receding expectations that the Federal Reserve will raise U.S. interest rates next month supported demand for the yellow metal. The Shanghai Composite tumbled nearly 9% on Monday, the biggest one-day drop since February 2007, on investor disappointment that Beijing held back from implementing fresh measures over the weekend to support stocks after markets fell 11% last week. In Europe, Germany’s DAX crashed almost 3%, while the Dow and S&P 500 futures signaled a drop of at least 2% at the open, as fears of a China-led global economic slowdown spooked traders and rattled sentiment. Financial markets have been roiled since China devalued the yuan on August 11, sparking a selloff in equities, commodities and emerging-market assets. Gold futures for December delivery on the Comex division of the New York Mercantile Exchange shed $3.90, or 0.34%, to trade at $1,155.70 a troy ounce during European morning hours. Gold rallied to $1,167.90 on Friday, the strongest level since July 7, as concerns over the health of the global economy fanned hopes that the Fed could delay raising interest rates till the very end of 2015. Gold fell to a five-and-a-half year low of $1,072.30 on July 24 amid speculation the Fed will raise interest rates in September for the first time since 2006. But prices have since rebounded almost 9% on hopes of a delayed U.S. rate hike.

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