Gold Eases Near $1,235 Even As Euro, Equities Down

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The price of gold slipped back near one-week low Tuesday morning even as the euro and equities eased, signaling risk aversion. In the recent past, gold was trading inversely to equities on safe haven demand amid euro zone sovereign debt issues, rising inflation and low interest rate levels.

Gold for August delivery, the most actively traded contract, was down $4.60 to $1,236.10 an ounce, after advancing to a fresh all-time high of $1,266.50 an ounce intraday Monday. China's plan to gradually remove its currency peg to the U.S. dollar initially fueled a rally in stocks and commodities yesterday.

However, analysts expect this pullback to be less severe than the previous pullback when gold dropped from $1,250 to $1,170 during May.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were unchanged at a fresh all-time high of 1,307.96 tons.

Meanwhile, the U.S. dollar continued to move up from its 3-week low versus the euro and trading firm against the British pound. The greenback edged down versus the yen.

Elsewhere, the prices of silver and platinum ticked lower in morning deals.

Today, traders will look to the report on existing home sales for May from the National Association of Realtors and the house price index for April from the Federal House Finance Agency, scheduled for release later in the day, to get clues on the strength in the recovery of the economy.

The two-day FOMC meeting will begin today and the interest rate announcement is due out tomorrow. (Provided by RTTNews)