Listless Gold Mired Below $1300

 | Aug 06, 2014 07:06AM ET

Gold prices have been flat all week, and this trend continues on Wednesday. In the European session, the spot price stands at 1289.04 an ounce. On the release front, ISM Non-manufacturing PMI posted strong gains in July, rising to 58.7 points. Wednesday's major event is Trade Balance, with little change expected in the upcoming release.

Gold is sensitive to geopolitical events, as investors often seek the safety of the precious metal in response to global turmoil . However, despite the fighting in Gaza and turmoil in eastern Ukraine, gold prices have been steady over the past three weeks, hovering close to the key $1300 level. Israel and Hamas appear to be adhering to the most recent ceasefire, but the situation remains fluid in the Ukraine. If tensions between the West and Russia worsen, we could see gold benefit and post gains against the dollar.

On Tuesday, ISM Non-manufacturing PMI looked sharp, rising to 58.7 points last month. This easily beat the estimate of 56.6, and was the index's best showing since February 2011. This follows a strong Manufacturing PMI reading last week, with the index climbing to 57.1 points, a three-year high. There was more positive news on Tuesday, as Factory Orders had an impressive July, gaining 1.1%. These solid numbers point to healthy expansion in the US manufacturing and services sectors, and have helped strengthen the dollar and keep gold prices below $1300.