London 10/07/2012 – Gold was rangebound once more on Tuesday, holding onto the slight gains made on Monday, in quiet and cautious trading.
Spot gold was last at $1,590.39/1,591.00 per ounce, up $3.15 on the close – it has been confined to a narrow sub-$9 range so far.
“Gold prices were little changed on Monday and latest positioning data shows that investors have reduced their exposure to gold again,” Credit Suisse said in a note, predicting further range-trading in the coming days.
Inflows into ETFs have slowed to an average monthly pace of 250,000 ounces per month in 2012 from 1.2 million ounces per month in 2011, research from MKS Capital showed.
“With central banks starting a new easing cycle, gold should remain supported to the downside,” Credit Suisse added, “However, at the same time negative technical indicators should limit the upside potential.”
European worries still dominate the market, with Spanish bond yields again edging above seven percent.
“This caused risk-averse trading early in the London session, pushing the euro lower,” MKS Capital said.
Overnight, eurozone leaders agreed to step in and lend Spain 30 billion euros by the end of the month in a deal aimed at addressing the lingering weakness in the Spanish banking sector.
The euro was last 1.2312/1.2314 against the dollar, down 0.0003 on the close and holding just above the two-year low of 1.2258 set on Friday. The dollar index dipped to 83.08, down 0.05 on the close.
In data published so far on Tuesday, the Chinese trade balance came in much higher than expected at 31.7 billion, up from 18.7 billion and its highest level since 2009.
French industrial production disappointed, showing a month-on-month decrease of 1.9 percent, one percentage point below expectations, but Italian industrial production increased 0.8 percent, beating a forecast for a drop of 0.3 percent.
The other precious metals followed gold, edging higher – silver was last at $27.36/27.42 per ounce, up four cents, platinum was at $1,438.00/1,444.50 per ounce, up 62 cents, and palladium at $581.20/585.70 was $1 stronger.
