Gold Prices Today Near 3-Week High on Chinese Yuan Fears

Gold prices today (Thursday) are down slightly after climbing to a three-week high yesterday amid yuan fears, a softer dollar, and a global equity rout.

The yellow metal finished Wednesday up $15.60, or 1.41%, at $1,123.20 an ounce. That marked the fifth consecutive session in which the gold price ended higher.

Gold prices have now recovered roughly 4% from the five-and-a-half year low of $1,077 hit in July.

Fueling this week's gain were mounting concerns over China's devaluation of the yuan.

gold prices per ounceThe People's Bank of China (PBOC) devalued its yuan by 1.6% Wednesday. That followed a record 1.9% devaluation on Tuesday. The aim is to boost exports and growth in the Asian nation, which is facing a serious economic slowdown. After several years of double-digit growth, China's economy is expected to grow just 7% this year.

The PBOC's moves sparked fears of a currency war and sent global equities lower.

The move also drove investors to safe-haven asset gold.

The Dow was down as much as 250 points intraday Wednesday before ending the day flat. Markets across Europe and the Asia Pacific finished the day in the red. The Euro Stoxx Index sank 3.11%, Germany's DAX tumbled 3.27%, and the Hong Kong Hang Seng plunged 2.38%.

A softer dollar has also been lifting gold prices. The September dollar index fell 1.17 points to 96.165.

"The impetus of course has been China and weak stocks," George Gero, a precious-metals strategist with RBC Capital Markets Global Futures, told Kitco. "Commodity traders forget they have to expect the unexpected."

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Gold had previously been off investors' radar due strong equity markets, he explained.

"Now, you had a surprise with stocks slumping because of China," Gero continued. "So some haven seekers have been returning."

Gold prices today gave back some gains in early trading Thursday. The yellow metal slipped 0.73% to $1,118.30.

Still, further gains for gold prices are expected as investors remain on edge amid all simmering geopolitical risks.

Uncertainty in the global markets also might keep the U.S. Federal Reserve from implementing the first interest rate hike since June 2006 when policy makers meet next month. That would be a positive for gold prices.

Despite recent gains, the gold prices today remain off 5.13% year to date. That offers one the best opportunities to buy the precious metal in a decade, according to Money Morning Resource Specialist Peter Krauth.

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