Gold rebounds on physical buying
Precious metal climbed to $1202.34 an ounce on Tuesday as the drop of prices below $1200 level yesterday encouraged physical buying on the shiny metal.
Gold started to drop since reaching the highest level in June at $1265.05 as investors deemed the metal overvalued and the high prices discouraged physical buying. But in July the price rally began to ease to reach a low of $1184.77.
Yesterday, gold shed $14.30 or 1.18% to close at $1196.60 an ounce. Gold Price was setin London on Monday at $1205.50 per ounce during the PM fixing surging from $1203.75 during the AM fixing. SPDR gold trust, the world's largest exchange-traded fund backed by bullion, soared 0.304 tonnes to 1,314.81 metric tons on July 12.
The yellow metal has been gaining lately due to fears stemming from the debt woes spreading in Europe but the high price of the metal lowered demand on it causing a balance.
Next week, eyes will be on banks stress tests that will be adopted on 91 large banks in the EU to assess their ability to absorb financial shocks, while this week investors will scrutinize earnings from U.S. companies to evaluate the progress in the largest economy in the world.
In currency market, the dollar is strengthening against majors as seen by the dollar index which rose for the third day to 84.47 from the today's opening at 84.21. On the other hand, the euro fell against majors ahead of the release of Zew survey in Germany and euro zone in which expectations refer to a drop in June.
Looking at other commodities, we see that oil slipped for the second day to $74.57 a barrel from the day's opening at $75.05.