Gold little changed, may face downward pressure
The yellow metal slightly changed on Wednesday after advancing yesterday on debt concerns in the euro area, but the metal may retreat with the release of U.S. earnings.
Yesterday, gold added $14.20 or 1.19% to close at $1212.11 an ounce. Gold Price was setin London on Tuesday at $1216.00 per ounce during the PM fixing surging from $1206.50 during the AM fixing. SPDR gold trust, the world's largest exchange-traded fund backed by bullion, remained unchanged at 1,314.81 metric tons on July 13.
Gold gained the previous day after Moody's investor services downgraded Portugal's credit rating by two notches to A1 which sparked concerns that the huge sovereign debt will shave growth and falter recovery. Thus, investors resorted to the metal as a safe harbor amid the current financial instability.
However, today some optimism spread into markets after Singapore raised its full-year growth forecasts by nearly 15% and as Intel Corp. posted revenue record and raised its profits estimates which may affect gold negatively, especially as the high prices sap physical demand.
Meanwhile, gold is trading at $1213.15 an ounce recording a high of $1214.61 and a low of $1210.40. The surge to above $1200 levels is discouraging long positions by investors; probably they are waiting for strong downbeat data or news to beat on further rise.
On July 23, European banks stress tests results will be announced and this may affect the general sentiment in the market. Currently, the euro is trading near two-month high against the dollar, while most Asian and European shares advanced today.
Later on today, there will be FOMC meeting where policy makers are expected to keep interest rate at its current low level for a while to enhance recovery.