Forexpros – Gold prices swung between small gains and losses in thin trade on Monday, steadying after last week’s 7% plunge as the U.S. dollar gave back some of the gains made following news of North Korean leader Kim Jong il’s death.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,599.65 a troy ounce during U.S. morning trade, easing up 0.1%.
The February contract traded between a range of USD1,585.65 a troy ounce, the daily low and USD1,603.55, the session’s high.
Gold futures were likely to find short-term support at USD1,577.45 a troy ounce, Friday’s low and resistance at USD1,645.65, the high of December 14.
Markets awaited the outcome of Monday’s conference call of European finance ministers on a recently agreed fiscal plan.
Talks were to include plans to provide up to EUR200 billion in loans to the International Monetary Fund, as well as changes to the EU treaty that would allow a permanent EUR500 billion bailout fund to be established.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.09% to trade at 80.76, trimming an earlier advance of as much as 0.28%.
Meanwhile, concerns over the risk of credit rating cuts continued to weigh after ratings agency Fitch lowered France’s credit outlook and put six euro zone countries, including Italy and Spain, on review pending possible downgrades on Friday.
Europe’s biggest bank HSBC Holdings said in a report earlier that, “Gold prices are being influenced by factors that do not necessarily reflect underlying fundamentals.”
The report added that, “year-end book-squaring by institutions and profit-taking by hedge funds at the end of a difficult year may be weighing on gold, with potential buyers also reluctant to step in.”
Gold prices came under pressure during the Asian session, as news of the death of North Korean leader Kim Jong il and ongoing fears over mass euro zone credit rating cuts boosted the U.S. dollar.
Elsewhere on the Comex, silver for March delivery plunged 1.9% to trade at USD29.12 a troy ounce, while copper for March delivery shed 0.5% to trade at USD3.314 a pound.
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