Gold futures surged to a fresh three-week high Wednesday as the U.S. stock market sold off and the dollar tumbled, traders said.
As of 10:54 a.m. EDT, December gold futures were $14 higher to $1,121.70 an ounce. They peaked at $1,123.50, their most muscular level since July 20.
The focus remains on this week’s news that the People’s Bank of China has moved to devalue the yuan. Yet as the currency slid, there are also reports that the PBOC has intervened in the foreign-exchange market to stem the slide of its currency.
“All you have to do is point to the dollar,” said Jim Comiskey, senior account executive with Archer Financial Services, citing the Chinese buying to support the yuan. The September dollar index was down 1.17 points to 96.165.
Meanwhile, the Dow Jones Industrial Average was down by around 250 points.
“The impetus of course has been China and weak stocks,” said George Gero, precious-metals strategist with RBC Capital Markets Global Futures. “Commodity traders forget they have to expect the unexpected.”