Gold prices rose on Tuesday for a third consecutive day, as traders opted to target gold ahead of the EU summit on Wednesday, where traders were cautious ahead of the EU summit, which is expected to announce plans to solve Greece’s debt problem, in addition to recapitalize European banks, and increased the European Financial Stability Facility fund. Meanwhile, worse than expected U.S. housing data, in addition to falling consumer confidence boosted demand for gold as a safe haven.
Gold‘s appeal as a safe haven has diminished over the past period, as high volatility levels reduced the appeal of gold as a safe haven, however, as uncertainty continues to mount regarding the European debt crisis, in addition to rising volatility levels in markets, traders opted to target gold on Tuesday.
The outlook for gold remains generally to the upside, however, we still expect volatility to continue to dominate gold prices over the short term, and that could still weigh down on gold prices, but overall, our general outlook for gold prices remains to the upside. The focus in markets will remain onEurope, as traders wait for the final resolutions that will be provided by EU leaders on Wednesday.
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