The contest final gets underway in Sweden's Malmo, home to the country's largest community of Palestinian origin
world11 hours ago
Assets seen as higher risk, such as equities and commodities, rose in earlier trade after expectations grew that Bernanke would hint in testimony before Congress at 1400 GMT at another round of quantitative easing, but have since retreated.
Further monetary easing would be supportive for gold, weighing on the dollar and maintaining pressure on long-term interest rates, which keeps the opportunity cost of holding bullion low. If QE is not mentioned, gold could quickly correct.
Spot gold was down 0.2 percent at $1,586.86 an ounce at 1320 GMT, well off an earlier high of $1,599 an ounce, while US gold futures for August delivery were down $5.00 an ounce at $1,586.60.
Gold has traded within a $150 range for the last three months, largely tracking the euro/dollar exchange rate, a key price driver, as it awaits clearer direction on US policy.
The dollar recouped early losses against the euro on Tuesday afternoon and European stocks eased back from highs. Most investors were earlier positioning for more QE, but analysts saw a risk the dollar may bounce or stocks could drop if Bernanke stopped short of signalling more easing.
Physical demand in India remained lacklustre, with gains in the rupee versus the dollar, which make gold cheaper for local buyers, failing to stimulate much fresh buying.
India’s festival season, during which weddings will also take place, will start in August and continue until November. India is historically the world’s biggest bullion consumer, though China, where recent buying has also been soft, has emerged as a challenger for that title.
The world’s largest gold-backed ETF, New York’s SPDR Gold Trust, said its holdings fell another 3.6 tonnes on Monday, meanwhile, bringing total outflows since the start of the month to 13.4 tonnes. In the same period of the previous month, they rose just over 7 tonnes.
Among other precious metals, silver was down 0.2 percent at $27.24 an ounce. The gold/silver ratio, which measures the number of silver ounces needed to buy an ounce of gold, held near its 2012 highs at 58 as silver underperformed.
Spot platinum was up 0.2 percent at $1,415.25 an ounce, while spot palladium was up 1.3 percent at $580.57 an ounce.
Data from auto industry group ACEA showed European car sales for June declined to the slowest pace in eight months. Platinum group metals, which are chiefly used in catalytic converters, are heavily exposed to the car industry.
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