MCX Gold Tips : Bullion Bulls take charge on Yuan turmoil as on 13 August.

MCX Gold Tips : The yellow metal soared on Wednesday, recording gains topping 2 per cent as China’s stunning move to devalue its currency roiled global financial markets, boosting the safe haven demand for Gold.

China cut its daily yuan reference rate by 1.6% following 1.9% devaluation on Tuesday, rekindling fears over the start of a fresh Asian currency war, prompting a flight from risky assets and forcing traders to seek shelter in the safety of the precious metal.

A weaker dollar also boosted the demand for Gold as an alternative asset. Weaker greenback makes Gold cheaper for those holding other currencies, thus bolstering demand.

The dollar weakened on reduced prospects of a September Fed rate hike following the turmoil caused by the China devaluation shock as a slowdown in China hurts global commodity prices and exerts further downward pressure on inflation.

At the same instance, New York Fed President William Dudley stressed that while the China devaluation move had huge implications for the global economy, the Fed remains on track for a lift-off in interest rates in the near future.

Gold may continue to trade higher as China devalued its currency for a third day.

At the MCX, Gold futures for October 2015 contract closed at Rs 26,014 per 10 gram, up by 2.3% after starting at Rs 25,600, against the last closing price of Rs 25,426. It touched the intra-day high of Rs 26,034.