NEW YORK (TheStreet ) -- Gold prices were slipping Wednesday as strong earnings and a return of risk appetite tempered investor demand for gold.
Gold for August delivery was losing $7.10 to $1,206.40 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Wednesday has traded as high as $1,214.80 and as low as $1,206.10. The U.S. dollar index was rallying 0.10% to $83.61 while the euro was slipping 0.09% to $1.27 vs. the dollar. The spot gold price Wednesday was down more than $3, according to Kitco's gold index.
Blowout earnings from Intel(INTC) prompted a shift out of gold and into stocks as investor bet on riskier assets. Intel reported its best quarter ever after the bell on Tuesday and the news along with gold's double digit rally on Tuesday lead to a selloff in prices as investors took profits.
The U.S dollar was gaining strength Wednesday which also pressured gold. A stronger U.S. currency makes the dollar-backed commodity more expensive to buy in other currencies. Gold had been bucking this inverse correlation recently as investors opted for the perceived safety of the U.S. dollar and gold as the euozone nations struggled, but as market sentiment improved the currency rebounded from its recent losses.
Gold pushed through the $1,205 level on safe-haven buying Tuesday but could not rise above $1,225 an ounce. Many analysts believe that gold will continue to stay in a tight range for the summer as investors digest earnings results and economic data, which could shed light on the viability of a global economic recovery. Summer is also a slow buying period for gold with a lack of festivals in India, the world's largest consumer of physical gold. Demand picks up again in August and fall during India's wedding season, which typically pushes prices higher.
"I think we'll probably be in [the $1,200-$1,265] range for most of the summer," says Brian Hicks, co-manager of the U.S. Global Investors Global Resources Fund. "[Then] I think we will break out above that sometime in the fall when we hit that seasonally strong period for gold." The popular gold exchange-traded fund, SPDR Gold Shares(GLD), remains unchanged at 1,314.8 tons signaling that while investors might alter some gold positions their core holdings are consistent.
