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Gold gains in CNY terms

FXStreet (Mumbai) - Gold prices measured in Chinese Yuan terms advanced today after the People’s Bank of China announced a cut in its benchmark interest rates for the first time in more than two years.

Gold in CNY terms of XAU/CNY traded 0.29% higher at CNY at 7329.33 levels at the time of writing. The yellow metal shot up from a low of CNY 7285, after the PBoC reduced lending rate by 40 bps to 5.6%, while reducing the deposit rate by 25bps. The central banks also said it is further freeing up China’s interest rates by raising the ceiling for deposit rates to 1.2 times of the benchmark level, from 1.1 times previously.

The yellow metal gained in Yuan terms as it is known to have an inverse relationship with the level of interest rates in the respective economy. Moreover, the yellow metal may extend gains as the rate cut may result in depreciation of the Yuan against the US Dollar.

Gold (CNY) Technical Levels

Gold is trading near an immediate resistance located at 7330, above which gains could be extended to 7357 levels. Meanwhile, support is seen at 7300 and 7292 levels.

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