Gold Recovers as Yuan-Struck Investors Seek Safe Haven

12-Aug (Wall Street Journal) — China’s devaluation of the yuan rattled stock markets, triggered fears of a currency war and battered prices of commodities from crude oil to copper. But after a drop in Asian trade Tuesday, the price of gold is rising.

Worries that a lower yuan would reduce buying in China—one of the largest consumers of gold globally—drove the price below a psychological threshold of $1,100 a troy ounce immediately after Tuesday’s devaluation. It has since recovered to a three-week high of around $1,116. Prompting the gains: gold’s status as a store of value during uncertain times.

“It is all about how equities are not doing so well and talk of a currency war that has prompted the move to gold’s safe-haven demand,” said Barnabas Gan, Singapore-based economist with OCBC Bank.

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