Gold Prices Trade Sideways on PMI Miss (Update 1)

Updated from 10:09 a.m. EDT with settlement prices

NEW YORK (TheStreet) -- Gold prices traded sideways Tuesday as PMI manufacturing data came in a bit lower than expected, which renewed faint signs of possible Federal Reserve intervention.

Gold for August delivery settled down $1.20 to $1,576.20 an ounce at the Comex division of the New York Mercantile Exchange. The gold price traded as high as $1,584 and as low as $1,567.80 an ounce, while the spot price was climbing $1, according to Kitco's gold index.

Gold traded slightly higher after the PMI data but dipped below the break-even level later in the day.

"Gold is up today, I think one of the main reasons for that is the disappointing PMI data coming out of the U.S.," Will Rhind, managing director at ETF Securities U.S., said in the morning. "Perhaps another indication that the U.S. is stagnating or slowing down."

Silver prices for September delivery were down about 8 cents to $26.97 an ounce, while the U.S. dollar index was up 0.08% to $83.82.

Rhind said the slight miss was another potential warning sign for investors that the central bank would need to intervene and possibly enact a new round of quantitative easing.

Monday's trading session witnessed gold prices dip on worries that Spain would need a full bailout, coupled with renewed fears that Greece would default. A scenario in which both countries are in trouble would be somewhat anti-inflationary, which isn't good for gold prices.

Spain continued to loom in the background on Tuesday for investors but didn't appear to nudge prices as it did the previous day. Investors likely don't expect a full bailout of Spanish banks to occur this week, but any signal of easing there could spark a swing in the global gold market.

Gold mining stocks were mixed Tuesday. Eldorado Gold (EGO) charged higher to $10.14, up 34 cents, or 3.5%, while Agnico-Eagle Mines (AEM) was at $37.59, up 95 cents, or 2.6%.

Among other mining stocks, Barrick Gold (ABX) and Kinross Gold (KGC) both were down 1.4%. Randgold Resources (AUY) was falling about 1.1%.

-- Written by Joe Deaux in New York.

>Contact by Email.

Follow @JoeDeaux