By V. Phani Kumar, MarketWatch
TAIPEI (MarketWatch) — Gold futures slipped below the $1,600-a-troy ounce level during Asian trading hours Wednesday as signs of progress on U.S. and European debt issues prompted investors to sell the metal after its steep recent climb.
Gold futures for delivery in August GC1Q -0.59% fell $9.40, or 0.6%, to $1,591.70 an ounce, extending losses after a modest decline in the regular trading session in New York and after a journey into record territory recently.
Spot gold prices, meanwhile, rose $2.20 to $1,591 a troy ounce.
The losses for gold futures in electronic trading came after U.S. President Barack Obama said there has been “some progress” in talks with lawmakers on raising the U.S. debt ceiling. Read full report.
The fall in gold prices also came as worries over the Greece debt situation eased on comments by European Central Bank governing council member Ewald Nowotny. Nowotny told CNBC in an interview that there were “some proposals that deal with a very short-lived default situation that would not really have major negative consequences.”
But some analysts said gold prices were likely to be well supported in the near term.
Credit Agricole strategist Robin Bhar wrote in a note there was “no reason to sell gold in the current environment.”
He said gold prices could be supported in the “very near-term and ahead of the special EU summit on July 21, with financial markets already unnerved by the apparent lack of urgency among policy makers in the euro zone.”
