NEW YORK (TheStreet ) -- Gold prices were losing steam Friday as risk appetite slowly improved and investors opted for stocks over gold.
Gold for December delivery was down $1.50 to $1,249.40 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Friday has traded as high as $1,251.80 and as low as $1,245.10. The U.S. dollar index was slipping 0.16% to $82.56 while the euro was adding 0.11% to $1.27 vs. the dollar. The spot gold price was up more than $3, according to Kitco's gold index as investors opted for the physical metal over futures.
Gold was being met with lackluster buying Friday as investors shrugged off European sovereign debt worries and focused on positive data out of the U.S. and Asia as well as Basel III.
Officials from 27 countries will be meeting Sunday in Basel, Switzerland, to discuss the details of Basel III, which in essence will require banks to hold more capital to better protect themselves against another financial crisis. Big banks might be forced to raise more money than smaller ones. According to reports, this will impact banks in the U.S. less like Bank of America(BAC) and JPMorgan(JPM) as they have already been raising cash.
European banks, however, are now in the spotlight again. Germany announced earlier this week that 10 of its biggest banks will need to increase liquidity and Deutsche Bank(DB) is reportedly in the works to raise €9 billion through a share offering in order to start meeting requirements.
The meeting comes as markets started to panic this week that eurozone banks were saddled with more destructive sovereign debt than previously thought, but the stricter rules are helping to reassure investors. Traders were also ignoring gold on the news that China's imports surged in August and that Japan's economy grew at a faster pace than expected.
Gold prices were pretty much hanging around the $1,250 area. Although gold did manage to settle at a record high, it has yet to surpass its intraday high of $1,266 an ounce. Some analysts are pessimistic in gold's ability to do so in the short term.
Jon Nadler, senior analyst at Kitco.com believes that a lack of crisis and profit-taking could push gold prices lower. "I think that $1,245 really needs to hold ... absent that we could revisit $1,200 actually." Nadler says that if another currency or sovereign debt crisis materializes, however, gold could quickly reverse directions.
