Further Devaluation Of The Yuan Will Drive Gold Prices Higher
London (Aug 14) Summary: •Gold has broken out and the $1080 level remains solid support.
•Investors owning gold in non-U.S. dollar terms have actually done okay in the past year and some quite well with gold priced in Russian rubles.
•Further yuan devaluation will spur Chinese buying of gold.
Anyone that follows gold knows that there's little love for the commodity. Even with the rally this week, most of the headlines that I read were that this is a temporary bounce and that gold is still heading lower. The calls from the so-called experts range from gold falling to $900 and even as low as $350. I believe they are all wrong for several reasons.
For one, just by looking at the gold price chart, one can see that there is a huge amount of support around the $1080 level. A solid base has been built and what can't go lower must go higher. China's devaluation of the yuan was just the catalyst that gold needed to break out to the upside.