Investing.com - Gold futures inched lower in rangebound trade during European morning hours on Thursday, as most investors retreated to the sidelines ahead of the start of a two-day European Union summit in Brussels later in the day.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,573.65 a troy ounce during early European trade, shedding 0.3%.
The August contract traded in between a tight range of USD1,579.75, the daily high and a session low of USD1,572.95 a troy ounce.
Gold futures were likely to find short-term support at USD1,546.35 a troy ounce, the low from June 1 and resistance at USD1,605.25, the high from June 21.
Investors remained cautious ahead of the start of a two-day EU summit due to begin later Thursday, amid worries the talks will not result in any effective steps to strengthen fiscal integration and allow the euro zone’s rescue funds to buy government debt.
Hopes that European leaders would make headway on dealing with the debt crisis in the region faded after German Chancellor Angel Merkel reiterated her opposition to the idea of joint euro zone bonds on Wednesday.
Meanwhile, the yield on Spanish 10-year bonds rose to 6.97% in early trade, hovering just below the critical 7% threshold that prompted Greece, Ireland and Portugal to seek international bailouts.
Elsewhere, Italy saw six-month borrowing costs climb to the highest level since December at a debt auction Wednesday, as investor sentiment towards the country continued to deteriorate.
10-year Italian bonds yields climbed to 6.23%, up from 6.20% Wednesday. Italy is offering up to EUR5.5 billion in five- and 10-year debt in a closely watched bond auction later in the session.
Investors fear one or both countries may need a bailout similar to Greece by the fall.
Meanwhile, Wall Street investment bank Morgan Stanley lowered its 2012 gold forecast by 8% to USD1,667 per ounce. It also cut its 2013 forecast by 16% to USD1,816 per ounce.
Although gold’s appeal as a safe haven is boosted during times of economic uncertainty, the euro zone’s debt crisis has done little to bolster appetite for the precious metal in recent months.
A weakening euro and stronger dollar have weighed on gold instead, as the precious metal has been moving in tandem with riskier assets since hitting a record high of USD1,920 last September.
Gold has lost some of its safe haven appeal to the dollar, U.S. Treasuries and German Bunds, partly as a strengthening dollar makes the metal less attractive to buyers holding other currencies.
Elsewhere on the Comex, silver for September delivery fell 0.2% to trade at USD26.94 a troy ounce, while copper for September delivery was flat to trade at USD3.357 a pound.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,573.65 a troy ounce during early European trade, shedding 0.3%.
The August contract traded in between a tight range of USD1,579.75, the daily high and a session low of USD1,572.95 a troy ounce.
Gold futures were likely to find short-term support at USD1,546.35 a troy ounce, the low from June 1 and resistance at USD1,605.25, the high from June 21.
Investors remained cautious ahead of the start of a two-day EU summit due to begin later Thursday, amid worries the talks will not result in any effective steps to strengthen fiscal integration and allow the euro zone’s rescue funds to buy government debt.
Hopes that European leaders would make headway on dealing with the debt crisis in the region faded after German Chancellor Angel Merkel reiterated her opposition to the idea of joint euro zone bonds on Wednesday.
Meanwhile, the yield on Spanish 10-year bonds rose to 6.97% in early trade, hovering just below the critical 7% threshold that prompted Greece, Ireland and Portugal to seek international bailouts.
Elsewhere, Italy saw six-month borrowing costs climb to the highest level since December at a debt auction Wednesday, as investor sentiment towards the country continued to deteriorate.
10-year Italian bonds yields climbed to 6.23%, up from 6.20% Wednesday. Italy is offering up to EUR5.5 billion in five- and 10-year debt in a closely watched bond auction later in the session.
Investors fear one or both countries may need a bailout similar to Greece by the fall.
Meanwhile, Wall Street investment bank Morgan Stanley lowered its 2012 gold forecast by 8% to USD1,667 per ounce. It also cut its 2013 forecast by 16% to USD1,816 per ounce.
Although gold’s appeal as a safe haven is boosted during times of economic uncertainty, the euro zone’s debt crisis has done little to bolster appetite for the precious metal in recent months.
A weakening euro and stronger dollar have weighed on gold instead, as the precious metal has been moving in tandem with riskier assets since hitting a record high of USD1,920 last September.
Gold has lost some of its safe haven appeal to the dollar, U.S. Treasuries and German Bunds, partly as a strengthening dollar makes the metal less attractive to buyers holding other currencies.
Elsewhere on the Comex, silver for September delivery fell 0.2% to trade at USD26.94 a troy ounce, while copper for September delivery was flat to trade at USD3.357 a pound.