Investing.com - Gold prices were higher on Monday as concerns that China could let the yuan fall further after last week’s unexpected devaluation underpinned safe haven demand for the precious metal.
U.S. gold futures for December delivery were up 0.41% to $1,117.3 an ounce.
Uncertainty over the impact of last week’s yuan devaluation on global inflation expectations and the outlook for growth in China have sparked fears that the Federal Reserve could keep short-term interest rates on hold for longer.
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 on hopes of a delayed U.S. rate hike.
Investors were looking ahead to Wednesday’s minutes of the Fed’s July 28-29 meeting, which it was hoped would provide more clarity on its plans to hike short-term interest rates.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.29% to 96.89.
The dollar remained supported after data on Friday showed that U.S. producer prices were higher for a third straight month in July, while factory output increased at the fastest rate in eight months.
The encouraging data helped the dollar regain ground after falling sharply earlier in the week following the surprise depreciation of the yuan on Tuesday.
China’s central bank said on Thursday that there was no basis for further depreciation in the yuan, in a bid to reassure jittery global markets.
Elsewhere in metals trading, silver futures for September delivery rose 0.21% to $15.24 an ounce.
Copper for September delivery was down 0.68% to $2.335 a pound, not far from the six-and-a-half year trough of $2.29 set last Wednesday as the yuan tumbled.
A combination of concerns about oversupply and expectations of slowing demand from China, which accounts for approximately 40% of global demand, have weighed on the outlook for copper.