Spot gold prices are trading lower Wednesday, extending some sharp losses posted during yesterday’s session. Prices opened around unchanged levels in Asia but have since fallen to new session lows of around $1556, moving in tandem with a risk-off theme across Asian markets. Risk aversion remains in focus as market participants remain sceptical that an informal European Union (EU) meeting later today will yield any major ingredients to combat the eurozone’s debt crisis. Spot gold is now trading $1560 approaching important support levels pegged at $1554 and $1542, with a break of the latter seen as extremely negative. Prices need to hold around these levels if the pick up from the lows of $1527 are to remain intact. The continued risk aversion theme has spurred more buying into the USD, in turn putting some extreme pressure on the gold market. With talks getting firmer on the possible exit of Greece from the eurozone, buyers of gold would of been looking for the precious metal to re-gain its haven status, like it appeared to at the tail end of last week, but prices have since reverted back to risk mode.
EasyForexNews Research Team