Gold price spike keeps Asian buyers at bay

Gold's longest run of price gains in three months kept Asian buyers on the sidelines this week, steadying physical premiums in China, one of the world's top consumers.

Yuan-denominated gold prices in China, the world's biggest consumer of the metal, spiked more than 5 percent this week, boosted in part by investors seeking a secure store of value after Beijing devalued the yuan, traders said.

But gold's upturn stalled as the yuan firmed after China's central bank said there was no reason for it to fall further given the country's strong economic fundamentals.

Spot gold slipped from a three-week high of $1,126 an ounce on Thursday after a five-day rally that was its longest since May.

"At the moment, there are more sellers than buyers in Hong Kong or in China," said William Wong, assistant head of dealing at Wing Fung Precious Metals in Hong Kong.

"The (yuan) devaluation is making people uncertain about the economy," said Ronald Leung, assistant head of dealing at Wing Fung Precious Metals in Hong Kong. "If gold prices hold at current levels, maybe some physical demand will come back a bit."

China's gold demand this year is expected to at least hold steady with last year at just under 1,000 tonnes and is unlikely be dented by the yuan devaluation, the World Gold Council (WGC) said on Thursday.