NEW YORK (TheStreet) -- Gold prices were softening Thursday as investors opted for cash at the start of the third quarter.
Gold for August delivery was slipping $2.60 to $1,243.30 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Thursday has traded as high as $1,244.80 and as low as $1,239.10. The U.S. dollar index was losing 0.41% to $85.64 while the euro was rallying 0.64% to $1.23 vs. the dollar. The spot gold price Thursday was down 60 cents, according to Kitco's gold index.
The start of the third quarter provided little cheer for investors as weak manufacturing data from China, worries over the U.S. jobs number and a possible downgrade from Moody's on Spanish debt weighed on risk appetite. Can we add
Jittery traders are usually a plus for gold as they rotate into the safe-haven asset looking to preserve some capital. However, the Dow Jones Industrial Average lost 10% in the second quarter while gold prices popped more than 11% leaving gold one of the only profitable assets. If investors need money to cover losses in stocks or just want cash, gold is one of the best places to do it.
Thinning volume before the long holiday weekend in the U.S. and continued book-squaring could weigh on gold prices in the short term. After Monday's selloff, gold prices rallied slightly as investors bought gold to show they owned the metal in the portfolio for the first half of the year. These investors can be fickle though as they are just as apt to sell these positions as the third quarter gets underway.
Many analysts anticipate a tight range for gold prices in the next week as bargain-hunters and profit-takers battle over the precious metal. "Gold trends generally lower during the third quarter," says James Moore, analyst at TheBullionDesk.com in his daily metals report. "[However,] given the current concerns over inflation, slowing economic recovery and European debt, the metal may look to extend higher as investors continue to diversify from fiat currencies."
Silver prices were losing 8 cents to $18.62 while copper was down 5 cents to $2.89.
