Updates gold price reversal as dollar strengthens.
NEW YORK (
Gold continues to stay in a tight trading range as any U.S. dollar strength and subsequent weakness in gold prices is offset by bargain hunting. Investors seem torn between an optimistic global economic recovery, which would increase risk appetite for assets like gold, and pessimistic credit woes, which would buoy the U.S. dollar and pressure precious metal prices.
On Monday, bargain hunting initially supported gold prices in the $1,110 range as the U.S. dollar slipped .10%. But then the
reversed rising .18$ to $77.92.
Greece's recent credit downgrade
has prompted investors to buy the U.S. dollar as a safe haven asset. "The U.S. dollar is really expected to extend its rally against the Euro and the Yen because there are still basic problems overseas" says Jon Nadler, senior analyst at Kitco.com.
Gold prices are expected to maintain their inverse relationship to the U.S. dollar and volatility will be high this week as volume stays light. "At the moment we have a range of support just under $1,100 with the upside being capped at $1,130 to $1,140. That's the channel we expect to trade in until at least some further data comes out this week."
Gold prices were shedding $9.50 to $1,102 an ounce at the Comex division of the New York Mercantile Exchange. Gold delivery for February, the most actively traded contract, has traded as high as $1,120.80 and as low as $1,101.
were rising 10 cents in the beginning of the session but then lost 20 cents to $17.11. Copper was flat at $3.15.
Mining stocks, a more leveraged way to
invest in gold
, were mixed.
were lower at $38.80 and $47.02 respectively. Shares of
Freeport McMoRan Copper & Gold
were popping 1.58% to $77.75 while
was sliding 1.83% to $11.24.
SPDR Gold Shares
were down slightly $107.93. The popular physically backed ETF added 6.10 tons on Thursday on higher than average volume.
The two mining ETFs,
Market Vectors Gold Miners
Market Vectors Juniors
were at $45.36 and $24.81 respectively.
Written by Alix Steel in New York