Gold capped the biggest weekly gain in two months as the metal’s haven appeal finally started attracting investors again.
China’s unexpected yuan devaluation this week roiled global markets, pushing up the allure of gold as a store of value. The metal, which was neglected during the Greek debt crisis and has been languishing near a five-year low, rebounded to a three-week high Friday, before trading little changed.
Bullion has also been helped this week by declines in the dollar, which boosted the appeal of the metal as an alternative. Concerns that slowing economic growth in China and Europe will spread to the U.S. have also spurred gold buying. The Asian country said it bought about 19 metric tons last month, releasing data in a drive for more transparency.
“Anytime there’s fluctuations in currencies, people still see gold as a safe-haven investment,” Michael Smith, the president of T&K Futures and Options Inc. in Port St. Lucie, Florida, said in a telephone interview. “I would think even the people in Europe would buy gold to protect themselves, as their economy slows.”
On the Comex, gold futures for December delivery slid 0.3 percent to settle at $1,112.70 an ounce at 1:43 p.m. in New York. Prices climbed 1.7 percent this week, the most since mid-June.
Also on the Comex, silver fell. Palladium rose on the New York Mercantile Exchange, while platinum dropped.
Gold was little changed on Friday as concerns over the yuan devaluation started to dissipate. Losses were limited as the Bloomberg Dollar Spot Index fell as much as 0.2 percent.
The People’s Bank of China said in a statement Friday that it increased bullion holdings to 53.93 million ounces, or about 1,677 tons, by the end of July. The update comes almost a month after the PBOC ended six years of mystery surrounding its hoard, revealing a 57 percent jump in assets since 2009 and overtaking Russia to become the country with the fifth-largest stash.
Bullion will probably resume this year’s declines as concerns over the yuan devaluation keep fading, according to Oversea-Chinese Banking Corp.’s Barnabas Gan, the most-accurate forecaster for precious metals last quarter based on rankings compiled by Bloomberg. Analysts at Itau Unibanco Holding SA and Barclays Plc also expect this week’s rally to fizzle.