Gold remains steady as the previous session's slide tempted price-sensitive buyers back to the market, though it remains vulnerable to further losses after breaking key support levels. The precious metal slipped almost 2% to its lowest in nearly 12 weeks after selling of commodities after weak U.S. consumer confidence data pushed the prices through technical support around $1,160 an ounce.
Though many traders were on holiday and the rollover from the August futures to the December futures in full swing, there is a strong technical element to the recent slide in gold prices. A move back in doubts over euro zone sovereign risk has also undermined the metal's safe haven appeal, according to traders.
Elsewhere investors bought 273.8 net tonnes of gold via exchange traded funds in the April-June period, the secondlargest quarterly inflow on record. Expectations for rising inflation as a result of simulative policies or concerns about a further deterioration in fiscal deficits as a result of more government spending have largely supported gold prices, which hit a record high in late June.
Oil slid to a great extent because of doubts over the pace of recovery in energy demand. The U.S. Energy Information Administration (EIA) reported crude oil stocks rose 7.31 million barrels last week as imports jumped. The EIA also said gasoline and distillate stocks rose, though not as much as had been projected.
These figures were bearish implying economic growth froze in the second quarter. It has also been observed that OPEC is expecting prices to remain stable, these sentiments played game in the market. There is concern about Chinese policies aimed at preventing its economy from overheating as well as European sovereign debt and a possible double-dip global downturn.
