The prices of gold traded near 9-weeks on Thursday as with investors looking refuge at money in the precious metal amid a global financial crisis led by China, stock market, and accentuate geopolitical tensions.
Gold for February delivery on the Comex, New York surged $11.60, or 1.06%, to trade at $1,103.50 a troy ounce.
Spot gold had eased 0.1 per cent to $1,092.90 an ounce. But it wasn’t far from $1,095.30 reached on Wednesday, its highest since Nov 16, 2015.
Trading on the stock markets of China was slurried for the second time this week after just 30 minutes on Thursday as a fall of more than 7% after unleashed circuit breakers open.
Market sentiment was struck after the People’s Bank of China set the official rate of the midpoint of lower correction yuan compared with Wednesday. It was the biggest one-day fall in the rate of half a point since last August, when an unforeseen almost 2% devaluation unleashed a wave of broad-based selloff in the markets.
Some market participants see the tactics as an effort by China to boost growth, while others for a currency war that could destabilize the global economy are concerned.
The sombre mood spread to the European equity benchmarks markets, where the German DAX crashed 3.5% as another suspension of trading in China and sliding oil prices fueled strong fuel sales.
Moreover, Wall Street pointed to heavy losses in the opening, with Dow futures down 400 points, or 2.5%. On Wednesday, US stocks closed at their lowest level since early October, overwhelmed by new concerns about China and the slowdown in global growth and energy stocks as oil prices plummeted.
The yellow metal is nearly 4% so far this week on safe-haven demand amid a global stock exchange rout, concerns about the Chinese economy and geopolitical tensions.
The World Bank has on Wednesday trimmed their forecast for world economic growth for 2016, saying the weak performance of leading EMEs overall activity, like anemic displays developed countries like the United States tamped.
Adding to those concerns was to announce by North Korea that it had successfully tested a nuclear bomb powerful on Wednesday. The move drew threats of new sanctions even though the United States and weapons experts expressed doubts the device was so advanced as the isolated nation said.
The news came within days of tensions erupted in the Middle East between Saudi Arabia and Iran executed Riad after a Shiite cleric critical of the Saudi policy.
Gold is often viewed as an investment option in times of political and financial uncertainties.
In futures trading at the Multi Commodity Exchange, gold for delivery in far-month April spurted by Rs 204, ot 0.79% to trade at Rs 26,085 per 10 gram as speculators enlarged positions amid a firming trend overseas.
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