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Spot Gold 1598.10, Silver 27.43, Up a Tad; Seeks Fresh Macro Cues
Jul 10, 2012 By Francesca Freeman

-- Spot gold higher, helped by a weaker dollar
-- Gold expected to drift in range trade as investors await fresh directional cues
-- Wednesday's FOMC minutes likely to be read for stimulus signals

LONDON--Spot gold is slightly higher in Europe Tuesday, helped by a weaker dollar, but trading in a relatively tight range as investors exercise caution amid a lack of fresh market drivers.

At 0955 GMT, spot gold was 0.3% higher at $1,593.53 a troy ounce, having traded in a range of just $11 so far this session. The euro was 0.1% higher versus the dollar at $1.23236, boosting the appeal of dollar-denominated gold to buyers in other currencies.

"We may see the metals drift off today having tried the upside yesterday and failed," said David Govett, head of precious metals at Marex Spectron. "There is a real apathy in the precious metals market at the moment and unless there are any major economic headlines, this will continue."

Markets are generally underwhelmed by the outcome of Monday's Eurogroup meeting, in which euro-zone finance ministers reached an expected agreement on the aid package for Spain's banks and decided to give the country an extra year to meet its deficit targets.

Gold could push back above $1,600/oz if the latest Federal Open Market Committee meeting minutes, due Wednesday, reveal a shift toward further gold-positive monetary easing, said HSBC analyst James Steel.

"With little in the way of U.S. economic releases ahead of the Fed minutes, bullion prices may be subject to even modest changes in investor sentiment regarding the tone and direction of the Fed minutes," he said.

Should the U.S. election season and recent weak economic data bring the U.S. 'fiscal cliff' back into focus, a resulting weaker dollar could also spur a gold rally, Mr. Steel said.

"As the [dollar] becomes the center of financial market attention it may decline, with a commensurate gain for gold," he said.

Elsewhere in the precious metal complex Tuesday, spot silver was 0.2% higher at $27.44/oz, spot platinum was up 0.2% at $1,440.70/oz and spot palladium was 0.5% higher at $582.10/oz.

Write to Francesca Freeman at [e-mail]
(END) Dow Jones Newswires
07-10-12 0606ET
Copyright (c) 2012 Dow Jones & Company, Inc.

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