Forexpros - Gold futures edged higher during European morning hours on Monday, recouping a portion of the previous session’s sharp decline as investors eyed a meeting of euro zone finance ministers in Brussels later in the day.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,583.45 a troy ounce during early European trade, gaining 0.3%.
The August contract traded in between a tight range of USD1,583.95 a troy ounce, the daily high and a session low of USD1,578.05 a troy ounce. Prices hit a one-week low of USD1,576.55 a troy ounce on July 6.
Gold futures were likely to find support at USD1,551.35 a troy ounce, the low from June 29 and near-term resistance at USD1,609.85, the high from July 6.
Market sentiment steadied as traders were awaiting a meeting of euro zone finance ministers later Monday to discuss a plan announced last month to help the region’s indebted nations and banking systems.
Meanwhile, investors continued to monitor rising bond yields for peripheral euro zone nations, amid sustained fears over the region’s debt crisis.
Spanish 10-year yields rose above the psychologically important 7% in early European trade, reversing the decline made in wake of last week’s European Union summit. Similar-maturity Italian yields increased to 6.08%.
Also Monday, government data released earlier in China showed that consumer price inflation accelerated at the slowest rate since January 2010 in June, potentially giving Beijing room to further ease monetary policy.
Expectations of monetary stimulus tend to benefit gold, as the metal is seen as a safe store of value and inflation hedge.
Gold prices lost almost 1.5% on Friday, after official data showed that the U.S. economy added just 80,000 jobs in June, below market expectations for a gain of around 90,000.
Although the employment report was weaker than expected, many investors said it was not bad enough to spur the Federal Reserve to launch a third round of quantitative easing.
The central bank will release the minutes of its most previous policy setting meeting later this week, which could show whether the Fed is leaning toward more stimulus to boost growth. The central bank holds its next major meeting in late July.
Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would pump more money into the financial system.
Elsewhere on the Comex, silver for September delivery jumped 1% to trade at USD27.19 a troy ounce, while copper for September delivery added 0.25% to trade at USD3.418 a pound.
