Gold retreats ahead of the confidence reports
Precious gold fell for the second day on Tuesday but may rebound again after the release of confidence reports in the euro area and U.S.
Spot gold is traded at $1233.68 an ounce, recording a high of $1241.52 and a low of $1233.44, where momentum indicators are giving bearish signs on the daily charts.
Gold is facing downside pressure as some investors took short positions to lock in profits after the recent rally witnessed by the gold on the back of the renewed debt woes which sparked demand on the yellow metal as a safe haven during financial and economic crisis.
However, later on today European confidence report is expected to show that economic confidence in the 16-nation region dropped to 98.1 from 98.4 in May, while in the U.S. predictions are in favor of a decline to 62.5 from 63.3 in May.
Investors are meanwhile focusing on fundamentals from global economies to determine the strength of global recovery amid the planned spending-cut programs which is expected to weigh on growth.
Fears are still dominating markets despite the G-20 pledge to halve deficits by 2013. They also confirmed the delivery of existing stimulus plan to spur demand and stabilize public finances. Two weeks from now, EU leaders will apply stress tests on European banks to appraise their reaction if they faced a financial shock.
Gold is continuing its upside trend that started since November 2008 when debt woes aroused after the collapse of Dubai world followed by the Greek debt crisis. In June, gold reached it s highest record at $1265.05 an ounce due to financial and economic uncertainties.
Yesterday, gold shed $17.10 or 1.36% to close at $1238.72 an ounce. Gold Price was setin London on Monday at $1261.00 per ounce during the PM fixing retreating from $1256.00 during the AM fixing. SPDR gold trust, the world's largest exchange-traded fund backed by bullion, stood at to 1,316.18 metric tons on June 28.
In currency market, yen and dollar are the biggest winners as they advanced as refuges. On the other hand, the euro is currently traded at the lowest level versus the dollar since November 2008.