Gold Prices Pause on Greek Bailout Hangover
Gold for April delivery was falling $1.20 at $1,757.30 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,761.80 and as low as $1,750.70 an ounce while the spot price was down $5.90, according to Kitco's gold index.
On Tuesday, Greece secured a second, €130 billion bailout package -- helping push the Dow briefly above the key psychological 13,000 mark. Gold for April delivery closed up $32.60 at $1,758.50 an ounce.
"Some profit taking after yesterday seemed inevitable," said George Gero, senior vice president with RBC Wealth Management.
Two reports from Markit Economics on manufacturing activity in Europe and China were suggested continued troubles for the world's largest economies. Eurozone business activity dipped to 49.7 in February from 50.4 in January according to Markit Economics' purchasing managers index. Analysts had expected an increase to 50.6. Any reading below 50 suggest economic contraction.
Markit Economics' purchasing managers index on China manufacturing came in at 49.7 in February, rising marginally from 48.8 in January.
"Growth remains on track of slowdown, despite the marginal improvement in the headline flash PMI led by quickened production after the Chinese New Year," said Hongbin Qu, chief economist at HSBC. "With a meaningful rebound of domestic demand not in sight, external weakness is starting to bite, adding more downside risks to growth."
"US-based bullion dealers we polled over the past week report 'quiet' conditions and only 'sporadic' telephone call and transaction volumes, with would-be buyers of gold and silver only making an appearance in the wake of substantial rallies and not really buying on the dips," said John Nadler, senior metals analyst with Kitco Metals.
Nadler also noted a Reuters report suggesting that India -- the world's largest gold consumer -- could see gold imports fall as much as 35% this year as inflation eases and stocks rally. The Indian government expects gold imports to come in at $38 billion in 2012 compared with an estimated $58 billion this year.
Gold mining stocks were trading mixed Wednesday. Kinross Gold
-- Written by Ross Tucker in New York.
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