Gold firmer around $ 1116 as China hits equities hard

FXStreet (Mumbai) - Gold futures on Comex extends its recent run of gains and trades firmer in the European session, as the 2nd Yuan devaluation and poor China economic data continues to weigh on global equities, boosting the demand for gold as a safe-haven as well as a higher yielding asset.

Gold eases-off 3-week highs

Currently, gold trades 0.81% higher at 1116.70, bidding up for a break beyond 1119.10 highs. The yellow metal remains lifted as markets keep faith in the traditional safe-haven asset amid the recent PBOC led market turmoil which widely suspected as move towards staging a currency war. The Peoples Bank of China (PBoC) further devalued the Renminbi by a further 1.6% Wednesday after Tuesday's shock, adding pressure to currency markets worldwide.

Meanwhile, the US dollar was broadly sold-off, reversing initial gains, also added to the upside in gold prices. The US dollar index, a virtual gauge of greenback’s strength, now trades -0.62% lower at 96.61. A weaker greenback makes dollar-priced in gold cheaper to holders on other currencies.

Gold Technical Levels

The metal has an immediate resistance at 1120 and 1133.80 levels. Meanwhile, support stands at 1100 below which doors could open for 1093 levels.