Gold closed lower yesterday as euro eased against dollar, while safe haven buying for yellow metal was seen meager despite the cost of insuring peripheral euro zone bonds against default touched record highs and raised fresh worries about default.
The physical market remained cautious as jewelers were uncertain after bullion showed a sharp downfall during the session.
Gold may trade in a positive range in near term as the fundamentals are still supporting safe haven demand.
The persistent MENA unrest, slow pace of US economic growth and European debt crisis may consistently fuel positive sentiments to gold prices.
Weakness in dollar against the basket of currencies may further support the uptrend. Sluggish physical market and fall in SPDR gold holdings may dampen gains while the fresh buying interest might be created at lower levels in the near term.
The robust demand for gold as an inflation hedge from China ahead of fight against its stubborn inflation may support prices. Investors may take cues from development in European debt crisis and US economic data.
