Chinese Fears Send Gold Price to 3-Week High

12/08/2015 11:20

On Tuesday gold added to recent gains above the psychologically important $1,100 an ounce level after China's currency move surprised markets. Futures contracts in New York with December delivery dates were exchanging hands for $1,108.10 an ounce in after hours trade on Tuesday after ending the regular session up $3.60 at $1,107.70, a three week high. Shares of mining companies and industrial metal prices fell sharply in response as the devaluation makes commodities priced in USD more expensive and could dampen demand from China even further. Gold benefitted thanks to its status as a safe haven during economic turmoil and a storer of wealth. Richard Perry, market analyst at Hantec Markets was quoted by MarketWatch as saying "there are suggestions that a Chinese devaluation of the yuan will mean that Chinese investors who have suffered from the stock market blowout and now fearful of further yuan depreciation/devaluation, will opt for gold."