MANILA, Aug 12 (Reuters) - Gold gained for a fifth session
in a row on Wednesday to trade near a three-week high,
benefiting from weaker equities after China's devaluation of its
currency stoked fears of a forex war.
FUNDAMENTALS
* Spot gold XAU= was up 0.1 percent at $1,109.85 an ounce
by 0041 GMT, after peaking at $1,119 on Tuesday, its highest
since July 20.
* U.S. gold for December delivery GCcv1 gained 0.2 percent
to $1,109.50 an ounce.
* China's surprising 2 percent devaluation of the yuan, seen
as a move to bolster a flagging economy, was condemned by U.S.
lawmakers as a grab for an unfair export advantage.
ID:nL3N10M6AI
* The move hit global equities, prompting some investors to
seek safe-haven assets such as gold which has now recovered
around 3 percent from a 5-1/2-year low of $1,077 hit in a late
July rout.
* But China's currency devaluation is unlikely to distract
the U.S. Federal Reserve from a domestic economy that appears
increasingly ready for higher interest rates, according to
economists and Fed watchers. ID:nL1N10M1M0
* That could limit gold's upside potential. A looming hike
in U.S. interest rates had weighed on non-interest yielding
bullion.
* U.S. gold jewellery imports rose in the second quarter at
the slowest rate in nearly three years, Thomson Reuters GFMS
calculations showed, while imports of silver jewellery notched
their biggest jump in more than a year.
MARKET NEWS
* The dollar was trading not far from a two-month peak
against the yen scaled after China devalued its yuan. USD/
* U.S. oil prices edged up from six-year lows after China's
currency move underscored fears over its economic health and
OPEC production hit multi-year highs. O/N
DATA AHEAD (GMT)
0530 China Industrial output Jul
0530 China Retail sales Jul
0530 China Urban investment Jul
0900 Euro zone Industrial production Jun
1800 U.S. Federal budget Jul