In what could be termed as technical rebound, the price of gold was ticking higher Tuesday morning after falling near its three-year low in the previous session.
Close on the heels of Goldman Sachs, which lowered its price target for the precious metals yesterday, Morgan Stanley trimmed its gold and silver price forecasts as the US Federal Reserve prepares to scale down its stimulus program. The bank cut its 2013 gold price forecast by 5 percent to $1,409 an ounce and its 2014 estimate by 16 percent to $1,313.
Gold for August delivery, the most actively traded contract, rose $6.40 to $1,283.50 an ounce. Yesterday, gold settled lower near a three-year low tracking declining global equity markets with investors concerned over economic growth in China with tightening credit crunch conditions in the country. Worries over a potential liquidity crunch in China persisted with the People's Bank of China declining to inject money into the financial system even though bank-to-bank lending rates hit record highs last week.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, moved down to 985.73 tons from 989.94 tons.
Meanwhile, the U.S. dollar was hovering near a 3-week high versus the euro and sterling, while trading flat versus the yen and the Swiss franc.
In economic news from the euro zone, France's business confidence improved moderately in June from the previous month, survey data released by statistical office Insee showed. The business confidence index for the manufacturing sector rose to 93 in June from 92 in May. The figure matched economists' expectations. The index, however, remained below its long-term average.
U.K. retailers expect sales to pick up in July after remaining almost stable in June, latest monthly Distributive Trades Survey from the Confederation of British Industry showed. About 25 percent of firms reported that sales volumes were up on a year earlier, and 24 percent said they were down, giving a balance of 1 percent. This was below expectations of 10 percent.
Elsewhere, the prices of silver and platinum were trading higher in morning deals.
From the U.S., the Commerce Department will release its durable goods orders report for May at 8:30 a.m. ET. Economists estimate durable goods order growth of 3.3 percent for the month. On the other hand, orders, excluding transportation, may have edged down by 0.1 percent.
The Commerce Department will also release its new home sales report for May at 10 a.m ET. Economists expect new home sales of 460,000 for the month compared to 454,000 in the previous month.
The Federal House Finance Agency will release its house price index for April at 9 a.m. ET. The house price index is expected to have risen by 1.2 percent compared to the previous month.
Simultaneously, the S&P and Case-Shiller are scheduled to release the results of its house price survey for April. The consensus estimates call for a monthly increase of 1.5 percent on a seasonally adjusted basis.
Around the same time, the Conference Board is due to release the results of its consumer confidence survey for June. Economists expect a drop in the index to 75 from 76.2 in May.
