By Dave Brown — Exclusive to Gold Investing News
The price of gold has trended lower over the last week, down approximately 2.3 percent to the rang e of $1,639 per troy ounce. Earlier in the week prices were mainly driven by concerns about Spain 's ability to control its finances against default risk following reports of Spanish banks borrowing from the European Central Bank. On Thursday disappointing initial jobless claims, reduced existing home sales, and tepid numbers from the Federal Reserve Bank of Philadelphia's regional manufacturing index boosted arguments in favor of more accommodative monetary policy. All of these reports provide a potentially positive outlook for gold. Running counter to this economic data were reports from a number of big companies such as Bank of America (NYSE: BAC), Morgan Stanley (NYSE: MS), Southwest Airlines (NYSE: LUV), UnitedHealth Group (NYSE: UNH), and eBay (NASDAQ: EBAY) that beat Wall Street forecasts. Out of Europe Investment demand for asset classes considered higher risk, including euro-denominated securities and equities, fell slightly following the Spanish debt auction. Spain sold all the bonds at the auction; however, rising yields proved to be a concern for investors. The country wants yields to remain below six percent as that should inspire a level of confidence in fiscal solvency. On the horizon Investors will be keenly anticipating a Federal Reserve meeting next week, at which policymakers will discuss US monetary policy. Traders will be interested to note any clues on whether a third round of quantitative easing (QE) is expected. More QE would keep interest rates at historically low levels, and consequently affect the opportunity cost of holding gold positions.