Gold Prices Rejuvenate, Head Higher
NEW YORK (
) --
were rallying Tuesday after
IBM's
(IBM) - Get Report
disappointing earnings miss
and as weak revenue plagued corporate second-quarter results.
Gold for August delivery was adding $7.80 to $1,189.70 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Tuesday has traded as high as $1,193.70 and as low as $1,175.10. The
was rallying 0.09% to $82.70 while the euro was falling 0.15% to $1.29 vs. the dollar. The spot gold price Tuesday was slipping more than $5, according to Kitco's gold index.
Gold prices were rebounding from earlier losses Tuesday as investors bought gold at "discount" prices as protection against weak corporate earnings. Investors were staying cautious during a difficult earnings season in the U.S. that has highlighted how hard it is for companies like
Goldman Sachs
(GS) - Get Report
to make money, which is leading to light revenue and choppy outlooks.
Gold is typically a safe-haven bet for investors in uncertain trading times, which could support prices over the long term. In the short term, however, gold prices could see more volatility as traders also buy cash and the U.S. dollar. The yield on the 10-year Treasury note was 2.93% as investors rushed to buy U.S. debt. A stronger U.S. currency also makes gold, a dollar-backed commodity, more expensive to buy in other currencies, which can hurt prices.
Investors are also jittery on the euro
headed into Friday's results of the European Union banks' stress tests. The results will provide transparency on the health of the European banking system but investors are guarding themselves against any negative surprises.
"For the moment gold looks as if it will have to consolidate further after failing to hold the $1200 level," says James Moore, analyst at
thebulliondesk.com
. "Dips continue to draw bargain-hunting interest, however, the real test will be if gold can hold the May 21 low of $1,166."
Gold prices got a shock to the system last week after the Labor Department said the core consumer price index rose just 0.9% year over year which took inflation fears off the table. Those investors who had been buying gold as a hedge against inflation unwound their trades and put their money in other assets.
Gold has also risen 5% year to date after hitting a record high of $1,264 an ounce, which makes the asset a prime target for profit-taking. But persistent global economic uncertainty and investors looking to buy gold at "cheaper" prices will help buoy prices.
were rising 14 cents to $17.69 while copper was up 6 cents at $3.
Gold mining stocks, an alternative way to
, were rallying.
Kinross Gold
(KGC) - Get Report
was adding 1.29% to $15.66 while
Freeport McMoRan Copper & Gold
(FCX) - Get Report
was up almost 4% at $63.29. Other gold stocks
Agnico-Eagle
(AEM) - Get Report
and
Eldorado Gold
(EGO) - Get Report
were trading at $56.42 and $15.71, respectively.
More on Gold Gold Price News |
--
(SYMBOL) by Alix Steel in
.
Alix joined TheStreet.com TV in February 2007. Previously, she held positions in film and theater production, management, and legal administration. Alix has a degree in communications and theater from Northwestern University.
