Gold price declines on a decision by China’s central bank and on a stronger U.S. dollar

Gold price declined on a decision by China's central bank and on a stronger U.S. dollar. The People's Bank of China (PBoC) announced on Tuesday that it lowered the one-year benchmark bank lending rate by 25 basis points to 4.6%. The central bank hopes with this decision to support the country's economy and to calm down the markets.

The interest rate cut would be effective from Wednesday.

One-year benchmark deposit rates were cut by 25 basis point, reserve requirements (RRR) were lowered by 50 basis points to 18% for most big banks.

New reserve requirements would be effective on September 6.

The greenback rose against other currencies after the release of the better-than-expected U.S. consumer confidence index. The index rose to 101.5 in August from 91.0 in July, exceeding expectations for a rise to 93.4. July's figure was revised up from 90.9.

The increase was mainly driven by the better outlook for current conditions. The present conditions index climbed to 115.1 in August from 104.0 in July. It was the highest level since November 2007.

Gains were limited as it is unclear if the Fed will start raising its interest rate in September.

September futures for gold on the COMEX today decreased to 1133.60 dollars per ounce.