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Gold trades flat as market awaits E.U. summit news

Published 06/27/2012, 09:44 PM
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Investing.com - Gold prices were flat to lower in Asian trading Thursday in quiet trading as investors waited on the sidelines to see if leaders at a European Union summit will brush off political concerns and agree on fiscal and financial measures to contain and extinguish the European debt crisis.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded down 0.07% at USD1,577.35 a troy ounce.

Gold hit at a low of USD1,574.25 a troy ounce and a high of USD1,579.55 a troy ounce early during the session.

Gold futures were likely to test support at USD1,568.55 a troy ounce, the low from June 26, and resistance at USD1,582.85, the high from June 27.

An E.U. summit opens later Thursday, where leaders will address ways to tackle the crisis.

Past summits and meetings have yet to produce concrete policy agreements with enough teeth to keep the crisis at bay for any significant period of time, and traders adopted a wait-and-see approach for the upcoming summit.

Germany continues to reject calls to take part placing a single bond issue backed by European countries to ease credit conditions in the continent's more debt-ridden neighbors.

Gold often trades inversely with the dollar, and any signs emerging that Europe appears willing to make politically tough fiscal decisions to tackle the debt crisis will send both the euro and gold rising and the greenback dropping.

Better-than-expected data out of the U.S. kept gold slightly at bay early in the session.

The National Association of Realtors reported that pending home sales jumped 5.9% in May, far above market calls for a 1% increase and matching a two-year high hit in March.

Earlier this week in the U.S., the Standard & Poor’s-Case-Shiller home price index fell at an annualized rate of 1.9% in April, better than expectations for a 2.5% drop.

Housing threw the U.S. into the worst economic downturn since the Great Depression and continues to lag on its recovery.

Also in the U.S. orders for durable goods rose by a seasonally adjusted 1.1% in May, outpacing expectations for a 0.4% gain.

However, core durable goods orders, which are stripped of transportation items, rose by a seasonally adjusted 0.4% in May, below market forecasts for a 0.7% gain.

Positive U.S. economic indicators tend to put to rest expectations that the Federal Reserve will stimulate the economy with monetary easing tools that weaken the dollar as a trade-off for more robust economic activity.

Elsewhere on the Comex, silver for September delivery was up 0.15% and trading at USD27.040 a troy ounce, while copper for September delivery was up 0.39% and trading at USD3.362 a pound.






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