Forexpros – Gold futures were steady on Monday, hovering just below the psychologically important level of USD1,800-an-ounce, as markets continued to eye developments surrounding Italy’s debt crisis.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,785.85 a troy ounce during early European morning trade, easing down 0.13%.
The gold contract traded between a range of USD1,781.65 a troy ounce, the daily low and USD1,797.55, the daily high and the highest since November 9.
Italy’s president appointed former European Commissioner Mario Monti on Sunday to head a new government, following the resignation of Silvio Berlusconi on Saturday.
Monti will be charged with implementing urgent reforms to end a crisis that has endangered the whole euro zone.
German financial service provider Commerzbank said in a report late Sunday that, “It is still unclear whether a new government in Italy will be able to successfully consolidate its budget without external help. Gold should therefore continue to profit from the persisting high uncertainty.”
Meanwhile, traders remained cautious ahead of a EUR3 billion Italian 5-year bond auction, later in the day, in what was being seen as a key test of investor confidence in Italian debt.
Markets have been focusing on Italy in recent sessions, after the country’s borrowing costs rose above the 7% mark that prompted peripheral euro zone nations, Greece, Portugal and Ireland to seek bailouts.
In Greece, the country’s finance minister said his priority was to ensure the country receives its sixth tranche of bailout funds after Prime Minister Lucas Papademos was sworn in.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.23% to trade at 77.28.
Gold prices often move inversely to the U.S. dollar, as gold becomes more expensive for buyers using other currencies.
Elsewhere on the Comex, silver for December delivery slumped 0.74% to trade at USD34.42 a troy ounce, while copper for December delivery rallied 2.3% higher to trade at USD3.543 a pound.
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