SINGAPORE: Gold traded little changed on Thursday, after bouncing from a key support level at $1,530 an ounce in the previous session, as investors remained focused on Spain's struggle with its finances and frail banking sector.
Bullion broke ranks with riskier assets in the previous session, after bargain hunters entered the market as prices failed to break the $1,530 level for the third time this month.
Gold's performance in the previous session could be partly attributed to safe haven flows that spilled out of Treasuries and currency markets, some traders said, but whether such flows would be sustained to push up bullion prices was questionable.
"The situation in Europe isn't likely to improve much, and may need additional stimulus measures, which we don't expect to see any time soon," said Hou Xinqiang, an analyst at Jinrui Futures in the southern Chinese city of Shenzhen.
Gold bugs have pinned their hopes on further monetary easing by central banks to keep lending costs low, which would raise the inflation outlook and so benefit gold.
Nervous investors piled into US Treasuries and other low-risk assets as Spanish and Italian government bond yields rose to dangerously high levels, even after the European Union offered Spain more time to cut its budget deficit and direct aid to recapitalise distressed banks.
Latest opinion polls in Greece brought little comfort to investors, as they showed parties for and against a bailout neck-to-neck or very close to each another.
Spot gold lost more than 6 percent on the month to stand nearly flat at $1,561.44 an ounce by 0319 GMT, stretching its losing streak to a fourth month and matching a similar run in late 1999 and early 2000, when it traded below $300.
US gold inched down 0.1 percent to $1,561.40.
The euro fell to a near two-year low against the dollar earlier in the day, while the dollar index struck its loftiest level since September 2010, pressuring commodities priced in the greenback.
Investors will closely watch a string of important data, including US preliminary first-quarter gross domestic product due later in the day, a US employment report and China's official purchasing managers index due on Friday, to assess the state of the global economy.
Contracts to purchase previously owned US homes unexpectedly fell in April to a four-month low, undermining some of the recent optimism that the housing sector was touching bottom.
Comments
Comments are closed.