Gold prices were hovering on Monday, the first trading session after the metal endured losses of more than 3 percent during trading last week, according to
Pressuring the yellowish metal downward in value on Monday was the strength of the U.S. dollar. Also pinching the dollar was concerns about the likelihood of deflation, which would be prompted by the prospects of the pace of global growth and developing slowing.
By contrast, preoccupations about inflation helped drive the yellowish metal toward its 11th consecutive year of gains, which occurred last year. Rather, concerns about deflation are snowballing and gaining momentum in the aftermath of reports citing the reduced pace of global activity.
The sovereign debt crisis thrashing about the euro zone for the past three years already has pressured global growth and production.
Minimized interest in purchasing the yellowish metal during the recent weeks might prompt people who typically deal in the yellowish metal to cut down on those dealings, physical dealers told the news source.
Thus far this year, as bullion attempts to achieve annual gains for a 12th consecutive year, the price of gold has stepped off early-year advances and presently is running through a flat experience on the markets.
"For the moment, I would say that without any market-moving news, gold will probably be rangebound. I see support at about $1,523 and the next resistance at $1,600," analyst Lynette Tan with Phillip Futures in Singapore told Reuters. "I think for the week ahead, people will still watch the EU summit for price direction of equities and gold."
At 11:57 a.m. on Monday, gold futures climbed 0.94 percent, a $14.80 lift to $1,581.70 per troy ounce.
As European leaders head toward Brussels for two days of conferences beginning on Thursday, anticipations of success are slimming down.
Once viewed as when the European Union could grab ahold of the scourge that has seized banks, markets and public finance systems of the 17-nation bloc, the summit is projected to have an important meeting but the new prime minister and finance minister of Greece are likely to miss that summit due to them being sick.
As the face of the sovereign debt crisis' damaging tendencies, the Aegean nation has received two bailouts since June 2010 and is believed to be teetering on the brink of removal from the euro zone due to the fiscal mess it is in and projected to cause.
But, shifting west, Spain has emerged as being the next frontline nation of the debt scourge.
The International Business Times reports
European leaders are projected to devote significant amounts of energy on Thursday and Friday to discussion about the best ways of preventing Spain's economic and financial situation from devolving into anything akin to what has plagued Greece.
"With the (U.S. Federal Reserve) event risk out of the way for now, Europe regains centre-stage as EU leaders meet for the summit in Brussels which starts on Thursday. But while gold's reaction to (U.S. central bank) outcomes is clear-cut, its reaction function when it comes to euro zone headlines has been quite muddled," states a client note penned by analysts with UBS, according to the International Business Times. "The ambiguity and difficulty in trading gold in this type of environment adds to the lack of urgency to hold gold especially now that balance sheet expansion from the Fed does not seem likely in the near-term."
Gold prices dropped as much as 3.8 percent last week, according to
Those steep losses might have attracted some investors into returning to dealings with the gols market, the news source reports.