NEW YORK (TheStreet ) -- Gold prices were trading flat Tuesday as volume thinned, and investors debated between riskier stocks and gold as safe haven asset.
Gold for December delivery was adding 90 cents to $1,227.10 an ounce at the Comex division of the New York Mercantile Exchange. The gold price today has traded as high as $1,231.10 and as low as $1,224.30. The U.S. dollar index was sinking 0.48% to $82.13 while the euro floated slightly higher to $1.28 vs. the dollar. The spot gold price Tuesday was flat, according to Kitco's gold index.
Gold was trying to retain its appeal as a safety net for investors as risk sentiment improved. Wal-Mart's(WMT) in-line quarter and BHP Billiton's(NHP) surprise takeover bid for Potash(POT) were shinning spots in an otherwise slew of downbeat economic data.
Investors were tentatively buying stocks but kept gold as a hedge against risk. The Federal Reserve will begin buying U.S. Treasuries today, which was part of a plan announced last week to help pump money into the economy. There is also speculation that the Bank of Japan might implement more stimulus measures of its own. England's core producer index in July was 3.1% year over year. The Bank of England's Govenor King said this inflation reading was a shock.
The global macro data will set the stage for a supportive gold buying environment as more money in circulation can lead to devalued currencies, which makes gold a safer place for investors to preserve their wealth.
"I think that $1,200 has to be a key level of support," says Phil Streible, senior market strategist at Lind-Waldock. "I think that $1,225 is a breakout zone and $1,235 is going to be our next resistance." Streible thinks once gold prices can breakout they will head to $1,300.
The gold ETFs continue to be popular ventures for investors. In the first half of 2010, the SPDR Gold Shares(GLD) saw $7.7 billion in net inflows.
In the most recent 13F filings, Eton Park Capital bought 6.5 million shares in the second quarter making the hedge fund the second biggest GLD holder behind Paulson & Co., which still owns 31.5 million shares. Soros Fund Management founded by George Soros sold 341,250 shares but still holds 5.24 million and is the seventh largest holder. When big named investors pile into gold, it could be tempting for retail investors to follow. The GLD currently holds 1,286.7 tons, unchanged from last Thursday.
