NEW YORK ( TheStreet ) -- Gold prices tiptoed lower Monday as investors digested lackluster results from the European Union's bank stress tests and as general risk appetite improved. Gold for August delivery settled down $4.70 to $1,183.10 an ounce at the Comex division of the New York Mercantile Exchange. The gold price today has traded as high as $1,194.80 and as low as $1,178.60. The U.S. dollar index was slipping 0.50% to $82.05 while the euro rallied to $1.30 vs. the dollar. The spot gold price was losing more than $8, according to Kitco's gold index. General risk appetite was back in play as traders sold gold for stocks. Investors' mood was lifted by better-than-expected June new-home sales and solid corporate earnings. Investors were also digesting the results from the European Union's bank stress tests, in which seven of the 91 banks that were tested failed -- better than the 10 expected to fail. The losing banks need to raise $4.5 billion. Gold prices had already sold off on the positive news Friday as risk appetite improved, and traders bought stocks over gold. Doubts had been raised over the weekend, however, that the stress test wasn't strict enough and allowed troubled banks to pass. With investors still anxious, gold prices will probably remain choppy in the short term. Any negative news in the stock market or out of the eurozone will trigger a push into gold. Investors look to gold as a safe haven asset as a secure place to preserve their wealth and balance the volatility of the stock market. Bargain-hunters could also support gold as bargain-hunters buy the metal below $1,200 an ounce. "For the moment, we expect the mixed mood in gold to continue given the strong selling above $1,200 and dip-buying below $1,190," said James Moore, analyst at thebulliondesk.com in his daily metals report. The summer months also tend to lead to weak gold prices regardless of other macro factors, as gold jewelry buying wanes in China and India. According to the World Gold Council, in the first quarter of 2010, jewelry demand accounted for more than half of all global gold demand. Total demand was 760.20 tons while jewelry demand was 470.7 tonnes.
Gold prices need strong jewelry buying to push prices past their old high of $1,264 an ounce. Wedding and festival seasons in India kick off in the fall, which is typically a strong buying period, and many analysts are expecting a pop in gold prices starting in early September.