Following its decline during the previous session, gold prices have remained stable at around $1,571 per ounce. The decline resulted from concerns that investors will go for the US dollar for safe haven due to the slowdown in the global economy that resulted from the worsening situation in the European debt crisis.
Gold was able to extend its increase for the eleventh year in a row due to fears of inflation however reports on the signs of a slowdown in economic activity worldwide has made a number of investors anxious. The global economy is already affected by the continuing European debt crisis.
There was no significant movement in gold prices as it reached $1,571.89 per ounce after going down to around $1,567 after the consumer confidence data of the US was released as well as indications that the largest economy in the EU is not in favor of the notion of having a common euro-zone bond that will be used in dealing with issues linked to debts.
The slowdown in the world’s economy will also compel investors, jewelers, and speculators to minimize purchasing according to physical dealers of the precious metal who have hinted at limited purchases recently.
US gold deliveries for August decrease by $2 per ounce as it went down to $1,572.90.
Wednesday saw the Nikkei average in Japan increase slightly as bargain hunters provided support after two losing sessions. However it appears that investors are not willing to take positions prior to the EU summit that is scheduled to start on Thursday.
The dollar gained against the euro, which has dropped to its lowest level compared to the dollar in over two weeks. This comes as yields for Spanish bonds increased and anticipation that the upcoming EU summit will not be able to contribute much to the resolution of the debt crisis in the region.
Oil prices remained above the $79 mark prior to the release of data that may likely indicate a reduction in crude supplies. However price increases may be limited by concerns on the debt crisis currently affecting Europe.