6/24/2010 05:36:00 PM
Admin
London - Spot gold is trading marginally lower Thursday morning, with analysts predicting further consolidation as the market awaits a catalyst to driver the market back into its record-breaking range.
Prices slid to an eight-day nadir Wednesday, after fresh data showing U.S. new home sales at record lows triggered a rapid selloff. Traders said it was also likely funds were booking profits on long positions after gold failed to hold above $1,250 a troy ounce.
At 0945 GMT, Spot Gold was trading at $1,232.90 a troy ounce, down 0.3% from Wednesday's close.
The other Precious metals were also trading lower. Spot silver was at $18.41/oz, down 0.2%. Spot platinum was at $1,546.50/oz, down 1.2%, and spot palladium was at $466.53/oz, down 0.8%.
With both the dollar and the euro stronger today Gold is under pressure. However the European sovereign debt situation keeps deteriorating slowly and thus the underlying fundamentals keep strengthening.We believe that the bulk of the sell off after Monday's high is over and that investors are using the current weakness to position themselves for the next move higher.
Comments from U.S. Federal Reserve late Wednesday failed to move the market substantially and, as expected, the benchmark rate was kept unchanged. The Fed said rates will be kept low for an extended period of time, which analysts now interpret as at least until the end of 2011.
"Reaction to the Fed's rate outlook is likely to see investors increase their risk appetite and in turn keep gold under pressure in the short term, The Bullion Desk's James Moore said. "However, ongoing concerns over European debt and speculation of a slowdown in U.S. economic recovery will continue to draw investment diversification towards gold as an alternative to fiat currencies."
