Gold inches down from one-week higher on bond selling from Portugal

The precious metal retreated slightly after three consecutive sessions of rise as bond-selling by Portugal yesterday lowered tensions inn markets, thereby reducing the appeal of the yellow metal as a safe haven.

Spot gold is traded at $1385.40 an ounce after recording a high of $1388.52 and a low of $1384.70, while oil slipped but still traded above $91.00 a barrel.

Among other precious metals, platinum dipped to $1791.00 from the day's opening at $1793.20, palladium hovered near the day's opening at $807.00 and silver plunged to $29.50 from $29.57, as of 07:25 GMT.

Yesterday, Portugal sold 10-year and 4-year government bonds worth 1.249 billion euros, where yield on the securities maturing 2020 inched down to 6.719% compared with 6.806% the previous auction and expectations of 7.0% while borrowing cost on bonds repayable 2014 soared to 5.396% from the prior 4.041%.

However, despite the successful bond selling by Portugal, some analysts still believe that the debt-mired country is a preferable candidate for asking for a bailout.

Today, eyes will be on Spain and Italy as they will also sell long-term bonds with some optimism after the Chinese and Japanese pledge to buy European bonds to ease the European debt woes.

The ECB will announce its rate decision later in the day followed by a press conference from the President of the bank Trichet, where expectations refer to holding interest rate unchanged in January.

In fact, the recent bond purchase by the ECB to the Portuguese debt was met by some criticism as it is expected to raise yields, causing further tensions in markets.

The euro eased today against the dollar while, on the other hand, the dollar index, which tracks the dollar movements versus a basket of major currencies, edged up to a high of 80.23 from the day's opening at 80.02.

Also, eyes today will be on the BoE rate decision and US jobless claims.