Forexpros – Gold futures were modestly lower during European morning trade on Wednesday, as investors awaited the release of the minutes of the Federal Reserve’s most recent policy meeting before pushing prices higher.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,577.75 a troy ounce during early European trade, dipping 0.15%.
The August contract traded in between a tight range of USD1,577.45 a troy ounce, the daily high and a session low of USD1,571.05 a troy ounce.
Prices fell to as low as USD1,564.45 a troy ounce on Tuesday, the lowest since June 29.
Gold futures were likely to find support at USD1,551.35 a troy ounce, the low from June 29 and near-term resistance at USD1,601.25, Tuesday’s high.
Gold futures tumbled nearly 1.5% on Tuesday as investors preferred to turn to the relative safety of the U.S. dollar amid growing fears over the health of the global economy.
The euro languished near a two-year low against the U.S. dollar, while the dollar index, which tracks the performance of the greenback against a basket of six other major currencies, hovered close to the highest level since August 2010.
Gold has lost some of its safe haven appeal to the dollar and U.S. Treasuries in recent months, partly as a strengthening dollar makes the metal less attractive to buyers holding other currencies.
Gold traders now shift their focus to the release of the minutes of the Federal Reserve’s most recent policy meeting later Wednesday, which could show whether the central bank is leaning toward more stimulus to boost growth.
Gold traders watch the Fed minutes closely for hints of whether the central bank will engineer another round of asset purchases, or quantitative easing.
Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would pump more money into the financial system.
Markets remained jittery after the German Constitutional Court delayed on Tuesday its decision on whether the euro zone’s bailout fund, the European Stability Mechanism, is compatible with German law.
The court said a decision could take months rather than weeks due to the complexity of the ruling. Without German backing, the ESM, which was originally meant to start on July 1, then delayed to July 9, cannot come into effect.
Meanwhile, the latest meeting of euro zone finance ministers also continued to weigh on investor confidence.
While the ministers agreed to grant Spain an extra year through 2014 to reach its deficit reduction targets, they did not come up with a final figure for aid for the country’s ailing banks but said some EUR30 billion would be available by the end of this month.
Elsewhere on the Comex, silver for September delivery rose 0.55% to trade at USD27.02 a troy ounce, while copper for September delivery added 0.2% to trade at USD3.404 a pound.
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