Gold for August delivery was falling $3.40 to $1,219.20 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Thursday has traded as high as $1,226.50 and as low as $1,216.50. The U.S. dollar index was slightly stronger at $86.76 while the euro added 0.01% to $1.22 vs. the dollar. The spot gold price Thursday was losing $6, according to Kitco's gold index.
Gold prices were treading water as better-than-expected economic data in the U.S. boosted investor interest in riskier stocks vs. safer gold. After the Dow Jones Industrial Average lost 8% in May , many traders took the decline in stocks as a bargain-hunting opportunity and used profits from gold, which popped almost 2% in the same month, to fund their hunt.
Also supporting the flight from safety was the news that the private sector added 55,000 jobs in May, which although less-than-anticipated was still a positive indicator headed into Friday's U.S. nonfarm payroll report. Gold wasn't the only asset suffering from increased risk appetite, the yield on the U.S. 10-year Treasury, also considered a safe place to put money, rose to 3.34% as buyers thinned out.
Despite the general sentiment shift, investors are still hedging their bets with gold. The popular gold exchange-traded fund, SPDR Gold Shares(GLD), added 0.60 tons this week. Although the number is considerably less than the 31 tons the ETF added last week, tonnage is still up almost 10% for May which highlights the fact that investors want continued exposure to gold as a safety net. Shares of the gold ETF were down 0.55% to $119.12. Gold prices could see a short-term correction, but dip buyers are expected to provide support for higher prices for the medium-term.
"[Gold has] been confined to [a] narrow range so far this morning as consolidation is seen on the back of the improved risk appetite," says James Moore, analyst at thebulliondesk.com. "But ... buying continues to been seen as investors look to diversify inflation and debt concerns ... Chart support for the moment is seen at $1212/1201 in gold ...while upside resistance is pegged at $1230/42/49.50."
