Gold Stable Ahead of Key US Data

 | Jul 22, 2014 07:57AM ET

Gold has edged lower on Tuesday, as the spot price stands at $1306.09 per ounce in the European session. On the release front, it's a busy day in the US, highlighted by Core CPI and Existing Home Sales, the first major events of the week from the US. The markets are bracing for another weak outing from Core CPI, while Existing Home Sales is  expected to improve sharply.

International trouble spots continue to grab the headlines, as nervous investors keep an eye on events Ukraine and the Middle East. Last week's downing of a Malaysian Airlines jet, apparently by pro-Russian separatists, has seriously frayed relations between Europe and the US with Russia, which have already been strained since the latter annexed Crimea. Fighting continues between the separatists and Ukrainian forces in Eastern Ukraine. The Europeans are threatening stronger sanctions against Russia, and escalating tensions within Europe does not bode well for the euro. Meanwhile, the fighting in Gaza between Hamas and Israel has intensified, as the international community scrambles to try to get the two sides to agree to a cease fire. Casualties have been mounting on both sides following Israel's ground offensive into Gaza.

On Friday, US Consumer Sentiment remained steady at 81.3 points, but this was well below the estimate of 83.5 points. A day earlier, Unemployment Claims dropped slightly to 302 thousand, beating the estimate of 310 thousand. This figure marks a seven-week low, as the economy continues to churn out impressive employment data. With Janet Yellen telling Congress that a rate hike could be pushed forward if inflation and employment data exceeds expectations, improving employment data will put more pressure on the Fed to raise rates.