Gold Prices Steady as Traders Eye Euro
Gold futures carved out a small gain, following the euro higher as currency trading continued to dominate price direction in the precious-metals market.The contract for December delivery gained $2.60, or 0.2%, to settle at $1,713.40 per troy ounce on the Comex division of the New York Mercantile Exchange. It was the front-month contract's highest settlement since Nov. 18.Gold tracked movements in the euro, which edged higher in afternoon trading as market participants awaited more news from the two-day meeting of European finance ministers. The officials are discussing specific ways of bolstering the region's bailout fund, the European Financial Stability Facility.The euro has set the tone for gold prices in recent weeks. The 20-day average correlation between gold and the euro-dollar exchange rate recently reached positive-0.6, the highest level in more than four weeks.A weaker euro makes dollar-denominated gold futures seem more expensive to buyers who hold euros, potentially damping demand from those market participants."Everybody is waiting to see what Europe will do for itself," said Ira Epstein, director of the Ira Epstein division of the Linn Group.He added that if the euro-zone crisis were to heat up and investors were to shed their euro holdings, gold would to head higher. However, in absence of decisive developments "the gold market has found its own level to mark time with, void of a trend," he said.
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